Nigerians won’t be able to make use of their Naira debit cards for worldwide transactions as shortage of foreign trade (foreign exchange)worsens in Africa’s largest economy…
Nigerians won’t be able to make use of their Naira debit playing cards for worldwide transactions as shortage of overseas trade (foreign exchange)worsens in Africa’s largest economy and largest oil exporter, Daily Trust learnt.
Some banks have already alerted their customers on the newest development while it was gathered that others are keenly watching activities before implementing the policy owing to the shortage of foreign exchange.
This development is coming a few months after banks in the country decreased the monthly international spending limit on Naira cards to as little as $20. The daily international withdrawal limit has been around $100 for many banks till March when banks reduce international spending.
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Banks had in 2020 stopped the use of naira cards for ATM foreign currency withdrawals while reviewing monthly international spending utilizing naira cards from $500 to $300 and ultimately to $100.
According to data obtained from the Central Bank of Nigeria (CBN), Nigeria’s external reserves depreciated by $1.37 billion (3.37%) in the first six months of 2022 to $39.16bn as of June 30 from $40.52bn it closed in 2021. This is regardless of the recent surge in global energy prices
An additional scrutiny of the information also revealed that the external reserves fell to $38.882bn on August 11 from $39.219bn at the end of July 2022.
External reserves are assets held on reserve by CBN in foreign currencies and these reserves are used to back liabilities and influence monetary policy.
In the latest development however, First Bank announced that international transactions can be stopped on all Naira cards from September 30.
“Because of present market realities on foreign exchange, you’ll not be capable to use the Naira Mastercard, Naira Credit Card, our Virtual card and Visa Prepaid Naira card for international transactions. This will take effect on 30 September 2022.
“Please use your Visa Debit Multi Currency Card, Visa Prepaid (USD) Card and Visa Gold Credit Card to continue transacting overseas with limits of up to $10,000,” it said.
Standard Chartered Bank had earlier announced the suspension of worldwide transactions on Naira visa debit cards from August 1.
“Kindly be informed that effective August 1, 2022, International spend on our Naira Visa Debit Card will be suspended. Additionally, the International spend limit on our Standard Chartered Bank Credit Card however remains at $1,000 monthly and Foreign Currency Debit Card limits stay unchanged,” it had notified its customers in July.
A reliable source in one of the banks that haven’t applied the newest policy said ‘it’s a matter of time as we’re also observing the situation’
Experts expressed worries that banks are reacting to the realities of the market, noting that the CBN has explanations to make on foreign exchange shortage regardless of its many policies to encourage foreign exchange earnings.
“Are we not exporting at all? Are exporters not repatriating their funds to Nigeria regardless of CBN policies? Why are we having critical shortage? The fault is not with the banks, CBN should be capable to explain why we’re having these challenges,” noted an analyst who doesn’t want his identify in print.