Why CBN Increases Forex Allocation to Banks

The Central Bank of Nigeria (CBN) on Sunday announced the increase of foreign exchange (forex) allocations to banks to meet the requests of customers, particularly travelers, seeking forex for travel allowances, payment of tuition and medical fees, among other invisibles.

 

The moves followed the warning by the CBN Governor, Mr. Godwin Emefiele, at a weekend meeting with managing directors of Deposit Money Banks (DMBs), cautioning them to desist from denying customers, particularly travelers, the opportunity to purchase forex for Personal Travel Allowance (PTA), Basic Travel Allowance (BTA), tuition fees, and medical payments as well as Small and Medium Enterprises (SMEs) transactions or for the repatriation of Foreign Direct Investment (FDI) proceeds.

Confirming the discussions at the meeting of bank chiefs, the Acting Director, Corporate Communications Department at the CBN, Mr. Osita Nwanisobi, said in a note that the CBN remained committed to ensuring liquidity in the forex market to meet genuine and legitimate demands of customers.

 

He added: “The CBN agreed to increase the amount allocated to banks for travelers, Small and Medium Enterprises among others.