Banks Cut PTA/BTA By 50% To $2,000

Commercial banks have started cutting personal travel allowance (PTA) and Business Travel Allowance (BTA) by 50 per cent from $4,000 to $2,000, as the country struggles to keep its dollar demand under check.

This is as requests for PTA/BTA has reduced to twice in a year from one in a quarter.  Last year, banks had notified customers that PTA/BTA requests can only be presented twice in a year effective this year as against four times in a year and would only be disbursed in dollar cards.

The pressure on the naira at the foreign exchange market had continued unabated as the Central Bank of Nigeria (CBN) maintained its intervention to keep the value of the currency stable.

As at close of business on Friday, the value of the naira to the dollar stood at N462, a price range it has maintained for weeks while at the parallel market, the value of the local currency had been hovering between N750 and N770 to the dollar.

In a notice to their customers, banks stated that PTA/ BTA requests are now processed a maximum of twice annually per applicant to the tune of $2,000 per application where the request is within 14 days of the travel date.

Asides this, international school fees and upkeep requests are to be processed within 120 days from the date of approval, while all applications are processed and disbursed subject to forex availability, proper documentation and provided the account to be debited is sufficiently funded to cover the Form A charge and other processing fees.

Commercial banks had earlier stopped allowing international transactions on naira denominated cards after cutting monthly limits from $100 per month to $20 in an effort to reduce their foreing exchange burden.

The 30-days moving average of Nigeria’s external reserves had depleted by 1.77 per cent this year as compared to $37.069 billion which it was on January 2, 2023, the 30-days moving average of the external reserves declined by $421.14 million to $36.414 billion as at March 9, 2023.

Meanwhile, last week, the naira edged against the dollar as it appreciated by N6 or 0.79 per cent week on week to close at N752 from N758 to the dollar in the previous week even as dollar demand took a calm in the face of scarcity crunch.

Also, at the investors’ and exporters’ forex window, the naira appreciated slightly by 0.05 per cent week on week to close at N461.50 from N461.75 to the greenback despite the growing forex demand pressure on the naira.

A look at activities at the Interbank Foreign Exchange Forward Contracts market shows the spot exchange rate remained unchanged at N462 per dollar. The weekly Naira FX Forward Contracts Markets, it was all green for the Nigerian Naira index across all forward contracts with appreciations reported for the 1-Month, 2-Month, 3-Month, 6-Month and 12-Month tenor contracts against the greenback by +0.11, +0.48, +0.82, +0.63 and +0.10 percents week on week to close at contract offer prices of N466.68, N473.97, N482.13, N508.90 and N542.79 to the dollar respectively.

Analysts at Cowry Assets Management said they expect the naira to trade in a relatively calm band across various market segment in the face of the naira scarcity and as currency traders and financial intuitions await next action point from the Central Bank of Nigeria (CBN).