In response to the continued devaluation of the Naira in the foreign exchange market, the Central Bank of Nigeria (CBN) has issued fresh guidelines regarding Personal Travel Allowance (PTA) and Business Travel Allowance (BTA). The CBN’s latest circular, signed by Dr. Hassan Mahmud, Trade and Exchange Department Director, mandates authorized dealer banks to discontinue cash payouts for PTA and BTA.
According to the directive, PTA and BTA allowances should now be facilitated through electronic channels, such as debit or credit cards, in a bid to enhance transparency, stability, and combat foreign exchange malpractices. This move signifies a significant departure from the traditional method of handling foreign currency transactions for travel purposes.
The policy underscores the CBN’s unwavering commitment to enforcing compliance and transitioning to electronic means for accessing travel allowances. The circular references the eligibility criteria for accessing PTA/BTA as outlined in Memorandum 8 of the Foreign Exchange manual and Circular FMD/DIR/CIR/GEN/08/003 dated February 20, 2017.
The CBN’s decision to disallow cash payouts for PTA/BTA aligns with its objective to ensure transparency and stability in the foreign exchange market, emphasizing the need to curb malpractices. The directive explicitly states that all authorized dealer banks are mandated to effect PTA/BTA payouts exclusively through electronic channels, prohibiting cash payments.
Despite previous intervention measures, the Naira’s value depreciated to N1503.38 per US dollar on Wednesday. While the CBN implemented reforms on January 29, including the ‘Financial Markets Price Transparency and Market Notice of a Revision to the FMDQ FX Market Rate Pricing Methodology,’ the exchange rate has remained within the range of N1,400 to over N1,500 per US dollar.
This latest development further underscores the CBN’s proactive approach to addressing currency devaluation and its commitment to fostering a more transparent and stable foreign exchange market for the benefit of all stakeholders.
