The new foreign exchange product by GTCO, the parent company of GTBank, which allows a customer to change dollars to naira instantly on internet banking, is seen spoiling business for black market operators.
Bank customers can now conveniently convert the dollars in their domiciliary accounts to naira, from the comfort of their homes or offices as banks innovate.
GTBank is the only bank seen to provide this for now through its internet banking solutions as other banks are expected to catch up soon.
The bank said you could convert up to $50,000 to naira daily. However, to convert naira to dollar is not available, customers said.
What this means is that the risks involved in transacting with street traders, also known as ‘Aboki’, to convert your foreign currency – including the possibility of accepting fake currency and higher exchange rate – will be minimal, a Lagos-based investment banker said. The banker said this would also enhance dollar inflows into the country’s foreign exchange (FX) market.
Oluwaseun Tijani, a tech lover, tweeted, “This makes a lot of sense, especially for remote workers that are struggling to exchange their foreign earnings. With this, there is no need to withdraw at the canter and run after Akobi before exchanging FX.”
“The parallel market will die slowly or become so irrelevant,” tweeted HallenjayArt.
“You can convert your US dollars in your GTBank domiciliary account to naira directly on our platform. It’s as instant as a regular transfer between accounts. Simply log into internet banking, click on FX transactions, and choose FX sales. Please note that you convert up to UD$50,000 daily,” the bank said.
“I tried this and it worked! Exchange rate was $/N771.5. We have been living in bondage since. We simply incentivised inflow into the parallel market and created that wide gap for no good reason,” Wilson Erumebor, senior economist, at the Nigerian Economic Summit Group (NESG), tweeted. He said if it is easy to instantly transfer foreign currency from one bank to another without stress, then the rates will be competitive across banks.
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“It’s an unnecessary regulation that breeds corruption and arbitrage. People should be able to transfer across banks,” he tweeted.
“The relevance of the parallel market is mostly about buying scarce dollars with naira and not about changing dollars to naira. The only way for black market to die is for banks to also allow customers to buy $1000 every month through internet banking,” Little Rock at ObeleOkwute, tweeted.
Samson J, estate manager, tweeted that the exchange rate of N771 to a dollar is too high. “That means I can buy from black market and deposit to my GTBank dollar account to make more money,” he said.
On Tuesday, the dollar was quoted at the rate of N763 as against N768.17 quoted on Monday at the Investors and Exporters (I&E) forex window, according data from the FMDQ.
The CBN on June 14, 2023, collapsed segments of the official FX market into a single FX market – the I&E window, where the “willing buyer and willing seller” was re-introduced. Based on this adjustment, the official rate rose from N463.38/$ to N763, the current rate.
In a circular signed by Angela Sere-Ejembi, CBN’s director of financial markets, the apex bank said operations in this window shall be guided by the extant circular on the establishment of the window, dated April 21, 2017 and referenced FMD/DIR/CIR/GEN/08/007, adding that all eligible transactions are permitted to access foreign exchange at this window.
