Nigerian banks step up measures to ration Forex sales

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By BENJAMIN ORISEMEKE, Abuja –

Nigerian banks have stepped up measures to ration sales of foreign currency to their customers, using their naira debit cards for overseas withdrawals to bolster declining foreign exchange inflows into Nigeria.

Nigeria’s largest DMB by market size, Zenith Bank Plc, has announced a review of the use of its naira card for international transactions.

In a notice to its account holders, Zenith Bank revealed that it has suspended the use of its naira card for cash withdrawals at the international automated teller machine (ABM). It also halted point-of-sale (POS) transactions on the international ATM, saying its latest management decision was due to economic reality.

Part of its board’s decision included reducing the monthly spending limit for international web transactions by 80%, while Zenith Bank revised the card limit to $20 from $100. The Tier 1 lender directed account holders who need a higher international spending limit to approach its branch and “apply for a foreign currency debit or prepaid card, which are available in US dollars, in pounds and euros”.

The notice reads: “Please note that we have temporarily suspended the use of Zenith Bank Naira cards for cash withdrawals at international automated teller machines (ATMs) and point-of-sale transactions.

“In addition, the international card’s monthly spending limit for web transactions has been revised from $100 to $20. This review responds to today’s economic realities.

“If you have higher international spending requirements, visit one of our branches and apply for a foreign currency debit or prepaid card, which are available in US dollars, pounds and euros.

The United Bank of Africa (UBA) had made a similar decision, lowering the international spending limit on its naira card from $100 to $20 per month. Guaranty Trust Bank followed suit.

In a press conference addressed by CBN Governor Godwin Emefiele earlier in February, the apex bank disclosed that the bankers’ committee had introduced the “RT200 FX” program to improve the repatriation of export proceeds. non-oil in order to increase liquidity in the market.

The FX ‘RT200’ which stands for the ‘Race to $200 Billion in Foreign Exchange Repatriation’ is a blueprint that will see Nigeria achieve the dizzying goal of repatriating $200 billion exclusively from non-oil exports over the next three to five years.

Analysts say banks tend to limit the amount Nigerian customers can carry abroad with their naira cards whenever there is an increased risk of domestic dollar shortages.

Reserves fell further by $175 million in February to $39.9 billion, despite the rebound in the price of crude oil, the country’s main source of foreign exchange.

While oil exports account for around 90% of foreign exchange earnings, rising prices have failed to boost the foreign exchange reserves of Nigeria, Africa’s largest crude oil producer, due to a lower than normal, even though part of the export barrels is used to finance gasoline imports. for local consumption at subsidized prices.

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