CBN Bans Payment of Travel Allowance by Cash as FX Crisis Deepens

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As the foreign exchange crisis deepens in Nigeria, the apex bank has directed all Authorized Dealer Banks in the country to stop payment of Personal Travel Allowance and Business Travel Allowance (PTA/BTA) by cash to applicants.

In a communique dated February 14 and signed by the Director of Trade and Exchange Department, Hassan Mahmud, the Central Bank of Nigeria (CBN) said the policy change is aimed at avoiding foreign exchange malpractices and bringing sanity into the FX market.

Before the CBN’s directive, it was learnt that some authorized banks that have FX licences pay into either domiciliary accounts or foreign currency-denominated cards, and pay PTA/BTA applicants in cash.

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“In line with the bank’s commitment to ensure transparency and stability in the foreign exchange market and avoid foreign exchange malpractices, all authorized dealer banks shall henceforth effect payout of PTA/BTA through electronic channels only including debit or credit cards.

“For the avoidance of doubt payment of PTA/BTA by cash is no longer permitted,” the CBN said.

As the authority was pushing out a memo to gain full control of the monetary system, the exchange rate closed at $/N1,515.28 at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX). At the parallel market, it closed at $/N1,610 on February 15, 2024

Since Yemi Cardoso assumed office as the new CBN governor, he has issued several memos as part of his strategic move to clean up the malpractices and round-tripping that the FX market has faced for decades.

Also Read:  10 Most Popular Currencies in Global Market

Author

  • Opeyemi Quadri

    Ope is a finance writer and researcher with 10+ years of experience in content creation. His interests cut across decentralized finance, investment, foreign exchange, government policies and politics.

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