The official rate of dollar in Nigeria is =N=197-199, so if the banks want to buy dollars from the "taxpayer" (CBN) they will pay less than =N=200 to get $1.

However, if the banks want to sell the dollar to an average Nigerian visiting the US, they are charging an average of =N=300. A cool 50% profit. Easy way of building banks' revenue as well as easy way of cheating the taxpayers.

Nigeria monetary policy is currently dancing Makaba and Makoosa. When the government is ready to sanitise this mess our policy will be dancing jelenke (steady and smooth). Until then let the banks be popping champagnes at the expense of the taxpayers.

NB: Before people start castigating people travelling abroad, remember there are one thousand and one reasons while people go abroad; Business meetings, quality education, families and friends reunion, short trainings to improve our labour force skill base etc. Until Nigeria constitution denies freedom of movement, it will be silly to castigate people travelling abroad. Our president, governors, ministers, legislators travels so well too.

its pathetic

These news bits could give Nigerians HBP unless something is done to counteract the trend. I honestly recommend you check this page to help your finances at this tough time: www.nairaful..com.ng/ Just a decent addition (without struggling for capital or all those hard-to-gets)

Op, you have muddled up everything!!

Modified:
Official rate is the rate at which CBN sells dollars to the qualifying members of the public through their banks. What qualifies for a bid are:
1. PTA/BTA (traveling allowance for those going abroad for personal or business reasons)
2. LC (for import of goods that are not delisted by CBN)
3. Form A (for overseas school fees or hospital bills)

Localamos:
Op, you have muddled up everything!!

HOW? always learn to buttress your assertion please.

fancyupage:


HOW? always learn to buttress your assertion please.

I'm sorry for that. I have modified my earlier comments.

We must be living in different world. A friend wanted pounds for tuition fee in the UK, the bank advised him to get the money from Bdc and put it in his domiciliary account. And that was what happened. Another friend is in UK on holiday as we speak, the bank denied him PTA. Please let us be practical. That said there is no justification for banks to seller forex at black market rate.

Localamos:
Op, you have muddled up everything!!

Modified:
Official rate is the rate at which CBN sells dollars to the qualifying members of the public through their banks. What qualifies for a bid are:
1. PTA/BTA (traveling allowance for those going abroad for personal or business reasons)
2. LC (for import of goods that are not delisted by CBN)
3. Form A (for overseas school fees or hospital bills)

Thank you for your maturity and civility.

Localamos:


I'm sorry for that. I have modified my earlier comments.

fancyupage:
We must be living in different world. A friend wanted pounds for tuition fee in the UK, the bank advised him to get the money from Bdc and put it in his domiciliary account. And that was what happened. Another friend is in UK on holiday as we speak, the bank denied him PTA. Please let us be practical. That said there is no justification for banks to seller forex at black market rate.

I recently heard of someone who successfully processed his child's school fees via Form A with Access Bank.

If you say dollars are scarce at CBN, I might agree with you. The implication of the scarcity means it's not all valid bids that can get dollars. That's why banks may, from time to time, advise their customers to source for dollars from the parallel market. But still I don't see how they profit from this.

Please when a bank charge me black market rate for using my card abroad, are you saying they are getting the dollars from black market or CBN? How can the bank justify charging me black market rate for using my card abroad? It is either the bank is making profit or an extension of the black market.

Localamos:


I recently heard of someone who successfully processed his child's school fees via Form A with Access Bank.

If you say dollars are scarce at CBN, I might agree with you. The implication of the scarcity means it's not all valid bids that can get dollars. That's why banks may, from time to time, advise their customers to source for dollars from the parallel market. But still I don't see how they profit from this.

Localamos:


I recently heard of someone who successfully processed his child's school fees via Form A with Access Bank.

If you say dollars are scarce at CBN, I might agree with you. The implication of the scarcity means it's not all valid bids that can get dollars. That's why banks may, from time to time, advise their customers to source for dollars from the parallel market. But still I don't see how they profit from this.

No sir.

The official rate is not N197 to $1.

There is no such thing as official rate.
That is a misnomer.

The real exchange rate is the rate at which buyers and sellers agree to transact.
In this instance, the BDC rate is the official Market rate.

On the other hand, we have the government SUBSIDY rate of N197 to $1.
This is the rate that government subsidized the banks, government agencies and select importers at the expense of the masses and the general economy.

It is also an indirect, fraudulent and pernicious way of taxing non-oil exports and remittances from Nigerians in the diaspora.

This fraudulent waste of scarce foreign reserves only distorts reality and our economy.

Right now, there is no saving grace for the Naira.
The chickens must come home to roost.

fancyupage:
Please when a bank charge me black market rate for using my card abroad, are you saying they are getting the dollars from black market or CBN? How can the bank justify charging me black market rate for using my card abroad? It is either the bank is making profit or an extension of the black market.

Payments made on your card for online/international transactions are settled by Visa or Mastercard using their own exchange rates. So if youre using Visa Card, you can search for their current exchange rate on google. Same thing goes for Mastercard. In a nutshell, nigerian banks may charge a fee in addition to the exchange rate of the switching company.

Localamos:


Payments made on your card for online/international transactions are settled by Visa or Mastercard using their own exchange rates. So if youre using Visa Card, you can search for their current exchange rate on google. Same thing goes for Mastercard. In a nutshell, nigerian banks may charge a fee in addition to the exchange rate of the switching company.

Not visa or master, Nigerian banks set the rate in this case.

plaetton:


No sir.

The official rate is not N197 to $1.

There is no such thing as official rate.
That is a misnomer.

The real exchange rate is the rate at which buyers and sellers agree to transact.
In this instance, the BDC rate is the official Market rate.

On the other hand, we have the government SUBSIDY rate of N197 to $1.
This is the rate that government subsidized the banks, government agencies and select importers at the expense of the masses and the general economy.

It is also an indirect, fraudulent and pernicious way of taxing non-oil exports and remittances from Nigerians in the diaspora.

This fraudulent waste of scarce foreign reserves only distorts reality and our economy.

Right now, there is no saving grace for the Naira.
The chickens must come home to roost.

Very enlightening write up. So how do the banks benefit unduly from this?

Localamos:


Very enlightening write up. So how do the banks benefit unduly from this?

Every week banks submit bids for dollars with the CBN.

The CBN, for example, sells them $20 at N200. So the bank sounds N4000 in total.

The the bank sells a paltry $5 to importers. Keeps $5 to fund the credit card transactions of it's customers at rates of say, N300 pee $1.

Then it funnels the remaining $10 to its vast network of BDC operators to sell at N350 or whatever the prevailing market rate.

So, in one week, the bank makes a profit of 50-70% with little effort, all thanks to the generous SUBSIDY from uncle government.

plaetton:


Every week banks submit bids for dollars with the CBN.

The CBN, for example, sells them $20 at N200. So the bank sounds N4000 in total.

The the bank sells a paltry $5 to importers. Keeps $5 to fund the credit card transactions of it's customers at rates of say, N300 pee $1.

Then it funnels the remaining $10 to its vast network of BDC operators to sell at N350 or whatever the prevailing market rate.

So, in one week, the bank makes a profit of 50-70% with little effort, all thanks to the generous SUBSIDY from uncle government.

Gone are the days when banks buy dollars directly from the CBN. Remember the days of round tripping.

But now, what the cbn uses is revised dutch auction system. Banks bids on behalf of their customers and winning bids are provided with dollars at the "subsidised " rate. Credit card lines too are presented for bidding.

I know you know DAS. So there's no need referring you to google.

Localamos:


Gone are the days when banks buy dollars directly from the CBN. Remember the days of round tripping.

But now, what the cbn uses is revised dutch auction system. Banks bids on behalf of their customers and winning bids are provided with dollars at the "subsidised " rate. Credit card lines too are presented for bidding.

I know you know DAS. So there's no need referring you to google.

C'mon man.
Be real.

A bank can make up a thousand fictitious customers in 5 minutes.
Don't forget, banks have been in this game since the Babangida days.

plaetton:


C'mon man.
Be real.

A bank can make up a thousand fictitious customers in 5 minutes.
Don't forget, banks have been in this game since the Babangida days.

Lol... I give up!