CBN bans travel allowances by cash as FX crisis deepens

The decision was disclosed by Hassan Mahmud, the Director of Trade and Exchange Department at the apex bank, in a circular dated Wednesday, February 14, 2024.

Titled, ‘Allowable Channels For Payout Of Personal Travel Allowance (PTA) And Business Travel Allowance (BTA)’, the circular instructed authorised dealer banks to henceforth pay applicants through electronic channels and not by cash.

The CBN noted that the move aligned with its commitment to ensuring transparency and preventing malpractices in the foreign exchange market.

“Memorandum 8 of the Foreign Exchange manual and the circular with reference FMD/DIR/CIR/GEN/08/003 dated February 20, 2017, stipulate the eligibility criteria for accessing Personal and Business Travel allowances (PTA/BTA).

“In line with the Bank’s commitment to ensure transparency and stability in the foreign exchange market and avoid foreign exchange malpractices, All Authorised Dealer Banks shall henceforth effect payout of PTA/BTA through electronic channels only, including debit or credit cards,” the circular read.

The development is the latest in a series of interventions by the apex bank to resolve the country's foreign exchange crisis.

Recall the naira has been continuously nosediving since the CBN introduced a floatation policy to liberalise the foreign exchange market.

On Tuesday, the naira plunged to a new all-time low, exchanging for N1,534 against the US dollar at the official market.