June 21, 2023 – Commercial banks in the country have taken the initiative to inform their customers through email notifications that they can no longer access foreign exchange (forex) at Central Bank of Nigeria (CBN) rates.
The emails serve as a means to communicate crucial information regarding the determination of exchange rates, emphasizing that the central bank no longer sets the rate as per the revised forex policy.
Among the messages received from a commercial bank, one explains the impact of the revised policy on accessing Form A and Form Q, which are commonly used for making forex applications.
“The changes to the Central Bank’s policy on Foreign Exchange have the following impact on the processing of all Form A (PTA/BTA, School Fees, Medical Fees…) and Form Q (SME) applications” A bank clarified.
The bank further stated that all applications will continue to be processed through the Bank meaning the banks will remain the destination for buying forex for eligible transactions.
Another bank notified its customers that “the Naira to Foreign Currency exchange rate is no longer fixed by the Central Bank” explaining that this means customers can no longer expect to buy forex at fixed rates.
“The rate is determined by the prevailing Foreign Exchange market rate at the point of Foreign Exchange purchase guided by the Investors and Exporters (I&E) window. The above will affect all new and pending Form A and Form Q applications.” another bank stated
A tier one bank also confirmed CBN will no longer determine rates and that it is the I&E Window rates that will be used “All applications will be processed through the Bank; however, the Foreign Exchange (FX) rate will no longer be determined by the CBN.”
“Applicable rates will be determined by the prevailing rate at the Investors & Exporters (I&E) window at the time the request is processed by the Bank.”
The bank also stated that the changes will affect “all new and pending applications” for forex.
Another Tier 2 bank stated,
“In line with the press release by the Central Bank of Nigeria dated 14th June 2023, the following changes have been effected immediately to the operations of the Nigerian Foreign Exchange (FX) Market.”
“All eligible FX transactions (Form M, Form A & Form Q) shall only be done via the I&E window. PTA, BTA, other Form A, and Form Q transactions will be accessed through the banks at the prevailing I&E market rate.”
The banks also stated that documentation requirements remain the same and all the information typically required for the application process will remain.
This suggests travel tickets and international passports with visa pages will still be required to process applications for travel allowances.
“All documentation requirements remain the same, and there are no changes in the application process.”
They also all called for the bank accounts of applicants to be fully funded.
By notifying customers that these fixed rates are no longer applicable, banks prevent any false expectations and ensure that customers are aware of the potential fluctuations in exchange rates, which could impact their transactions.
The change in exchange rate determination directly affects customers’ financial transactions. With the shift to market-driven rates, customers can no longer rely on purchasing forex at fixed rates.
This notification enables customers to plan their forex purchases accordingly and consider market fluctuations that might affect the cost of their transactions. This is why they insist that the customers fully fund their accounts “at all times.”