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CBN is not mandated to provide dollars to airlines – Emefiele

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The Governor of the Central Bank of Nigeria, Godwin Emefiele, on Tuesday warned foreign airlines on the demand for payment in dollars.

Emefiele, who spoke during the Monetary Policy Committee (MPC) meeting at the CBN headquarters in Abuja, said the banks are responsible for providing dollars for foreign airlines based on the Bilateral Air Services Agreement (BASA).

Recall Ripples Nigeria had reported that the CBN came to the aid of the foreign airlines following difficulty in repatriating their proceeds from sales of tickets.

The apex provided $265 million to settle the airlines’ foreign exchange challenge.

Foreign airlines had threatened to discontinue operations in Nigeria until the government solves the problem which was caused by scarcity of forex in the country.

In a bid to avoid buying dollars at a premium price in the Nigerian black market where the foreign currency is valued between N690 to N700, international airlines operating in Nigeria moved to force the CBN to disburse forex to them at an exchange rate of N436/$1.

In his remark at the MPC meeting, Emefiele said the aviation sector has always enjoyed priority allocation, but the CBN would always be the last resort after banks have tried to buy dollars on behalf for the foreign airlines in the official market, Investors and Exporters window.

Read also:CBN spends N9trn on intervention programmes in 3 years

He said: “The sector is a sector that has always enjoyed priority allocation. For other sectors where there are priorities like the airlines, we have always granted them the priority that they desire because we know people want to travel and they don’t want to be constrained by the need for them to travel.

“Despite this, we have seen that the number of travels or naira value of tickets issued by the airlines has increased. We decided to release $265 billion when the pressure was building aggressively.

“We will do everything possible and are determined to clear the backlog and consistently, at all the retail interventions. As long as the bank accounts are funded, we will continue to ensure that the cumulative backlog is cleared.

“But I think it is important for me to say this — the foreign airlines are saying this because they said we should respect bilateral air services agreements (BASA) that say proceeds of all their ticket sales must be repatriated out of the country. It did not say you must repatriate all your dollars.”

“No law that makes it compulsory that you must buy your dollars from the central bank. When you put money in your account, what it means is that you tell your bank to buy your dollar”, adding that, “Your bank will go to the legitimate or approved sources which in this case is the I&E to buy dollars and pay for your ticket sales proceeds.

“If they don’t find it, they may resort to the CBN but it doesn’t mean that the CBN is under compulsion to provide your dollars because it is good for me to say this so that people don’t just rest on the conclusion that CBN is under compulsion to provide the dollars.”

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