Despite FX Scarcity, Naira Plunging to $400/$, Pilgrims to Get Dollars at N197

Obinna Chima

Despite the shortage of foreign exchange in the country and continuing slide of the naira on the parallel market, the Central Bank of Nigeria (CBN) on Thuesday announced the federal government’s approval of N197 to the dollar for intending pilgrims travelling for the 2016 hajj in Saudi Arabia.

The naira shed N10 yesterday to close at N400 to the dollar, compared to N390 to the dollar from the previous day.

The naira also fell on the interbank market closing at N315.06 to the dollar, lower than N311.03 to the dollar from the previous day.

The central bank, in a circular addressed to all authorised dealers and the general public, said each intending pilgrims would be entitled to purchase a minimum of $750 and maximum of $1,000 as Pilgrim Travelling Allowance (PTA).

“No commission shall be charged by the banks for the sale of PTA to the intending pilgrims. The CBN shall sell the PTA to the designated banks in Lagos and Abuja and the accounts of the respective banks shall be debited as soon as the funds are disbursed.

“Each designated bank is required to sell to the CBN the unutilised funds not later than two weeks from the date of the last inward flight to Nigeria from Jedda, while the account of the bank shall be credited promptly,” it said in the circular.

Commenting on the naira pressure on the parallel market yesterday, the President, Association of Bureau de Change (BDC) Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, expressed optimism that the naira would rebound once banks that are agents to approved international money transfer operators start to sell foreign currencies accruing from remittances to licensed BDCs.

“Banks started selling FX to BDCs today (Thursday) and hopefully we expect to see an increase in dollar liquidity for BDCs. This is expected to impact positively on activities of BDCs and help correct what we are seeing on the parallel market,” Gwadabe said in a phone interview yesterday.

The CBN gave the directive for banks to sell FX from remittances to BDCs last month.
However, it remains uncertain how much foreign remittances will ease the pressure on the parallel market in the face of the subsisting CBN ban on 41 items from accessing FX from the interbank market.