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Nigerian banks to limit debit card spending abroad to ease FX risk

Published 19/07/2020, 11:19
Updated 19/07/2020, 11:24

By Chijioke Ohuocha
ABUJA, July 19 (Reuters) - Nigerian banks plan to reduce the
amount customers can spend abroad using debit cards on Monday,
two lenders said, as banks try to limit foreign currency
settlement risk.
The country is facing dollar shortages because of the sharp
fall in the price of oil, Nigeria's main export, and domestic
banks are trying to avoid transactions with hard currency.
Stanbic IBTC Bank IBTC.LG , the local unit of South
Africa's Standard Bank SBKJ.J , said it will halve the spending
limit for offshore card transactions to $500 per month from
Monday and will limit cash withdrawals to $100.
Another top tier lender Zenith Bank ZENITHB.LG said it
will temporarily suspend the use of debit cards abroad for cash
withdrawals and cut the monthly spending limit abroad by more
than half to $200.
"This review is in response to today's economic realities,"
Zenith said in a notice, advising clients to request prepaid
dollar cards.
Other lenders — Ecobank ETI.LG and Fidelity Bank
FIDELIT.LG — have also lowered withdrawal limits for
individuals while abroad.
Such moves have previously been at the behest of the central
bank, but it was not clear if the regulator was behind the
latest action. The central bank did not respond to a request for
comment.
The bank is battling to conserve dollar reserves that are
down 19% from a year ago. Last week it depreciated the currency
on the official market NGN= prompting the naira to weaken on
the black and over-the-counter spot markets. Bankers told Reuters that it now takes more than six months
to settle foreign lines of credit.
Nigeria is yet to resume forex sales to retail currency
traders after it banned international travel as part of a
lockdown measure to slow the spread of the coronavirus that has
killed 778 people and infected more than 36,000.

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