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The International Air Transport Association has released a statement clarifying that it is not responsible for the exchange rate applied to international flight tickets in Nigeria. This comes after reports suggested that IATA was behind the current hike in exchange rates.
In response to these reports, the IATA stated that “The exchange rate applied to international flight tickets sold in Nigeria are not determined by IATA, and it is incorrect to describe them as the “IATA exchange rate.”
According to IATA, airfares for international flights from Nigeria are denominated in US dollars and converted into naira, the local currency, for sale in the Nigerian market. The conversion process uses the official prevailing exchange rate provided by the country’s financial system.
IATA simply applies the spot rate at which the Central Bank of Nigeria sells USD through banks to the market at its fortnightly retail foreign exchange auctions.
The rate is not static, meaning that if the rate at which the CBN sells USD goes up, the exchange rate applied to airfares will follow suit and vice versa.
The PUNCH a few days ago reported that the exchange rates for international air tickets in Nigeria recently rose by 37.5 per cent above the official rate of N461.1/dollar to N634.0/ dollar. This increase has led to international airlines operating in Nigeria significantly increasing their airfares.
The statement reads, “The exchange rate applied to international flight tickets sold in Nigeria are not determined by IATA and it is incorrect to describe them as the “IATA exchange rate”.
“Air fares for international flights from Nigeria are denominated in US Dollars and converted into Naira, the local currency, for sale in the Nigerian market.
“These conversions use the official prevailing exchange rate provided by the country’s financial system.
“IATA simply applies the spot rate at which the Central Bank of Nigeria sells USD through banks to the market, at its fortnightly retail foreign exchange auctions. The rate is not static, i.e. if the rate at which the CBN sells USD goes up, the exchange rate applied to airfares will follow and vice versa.”
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