UPDATE: N400 per $1: CBN suspends Forex allocations for School Fees and Medical Bills as Naira drops

The Central Bank of Nigeria (CBN) and commercial banks have suspended the allocation of forex to pay medical bill abroad and school fees.

The announcement was made recently in Abuja as members of the Bankers’ Committee revealed that forex allocation for medical bills and school fees constituted 15% of foreign exchange demands in the country.

Briefing journalists after a meeting of the committee,  the Director, Banking Supervision, CBN, Mrs. Tokumbo Martins, said banks had resolved that most of the foreign exchange demands would be granted to developing the real sector.

Martins said that although the decision is a painful one, it was one of the sacrifices Nigerians are expected to make for the development of the economy in the long run.

“You know it is something that affects all of us and I think that the watchword is belt-tightening. It is the pain we may need to go through today, short term, so that there will be long term development in the country whether it is infrastructure, manufacturing etc.

Meanwhile, the naira dropped to a new all-time low of N395 on Friday February 19th to a United States dollar in the parallel market as importers scrambled for scarce forex, while some people are reporting as low as N400 per USD by some BDC.

“The dollar is falling because importers need forex to bring in their goods. They cannot keep on folding their arms because there is scarcity; they must keep buying; the only thing is that the quantity may reduce,” a forex dealer told the Punch Newspapers.

“We see the naira falling further in coming days and weeks if the central bank fails to lift the dollar restriction,” the Acting President, Association of Bureau De Change Operators, Aminu Gwadabe, said.

The Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said the CBN should address the forex crisis before it completely goes out of hand.

“Nigerians are perplexed at the endless slide of their currency, which is now trading at N400/$, the lowest point ever.

Sources: The New Telegraph / AllJournalist / Olisa TV

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UPDATE 1: The CBN has moved in the last 24hrs to refute claims that it has banned forex allocations for school fees and medical bills abroad // Source