Connect with us

Business

Dollar liquidity responsible for increased spending limits on Naira Cards

Published

on

Spread the love

By Odunewu Segun

Improved foreign exchange supply for Nigerian banks are the major reason for the increased dollar spending limits for payment cards that are denominated in local currency, National Daily has gathered.

This upward turn of financial policies put an end to the suspension of foreign payments using Naira cards in 2015 and 2016 following the decline of the production and prices of crude oil, the country’s main export.

United Bank for Africa, Zenith Bank, GTBank and several other banks in the country last October, announced the suspension of their overseas Automated Teller Machine card services due to the Dollar crisis. Also suspended by the banks were all foreign currency-denominated transactions, including those conducted on PoS machines and online.

Speaking on the new development, Head of Treasury at Ecobank Nigeria, Olakunle Ezun, said with improvement in the business environment, especially in the foreign exchange market, many commercial banks now enjoy improved dollar liquidity which prompted them to review spending limit on POS and online deals.

He said: “A lot of banks have improved liquidity. We’re returning to the pre-crisis era, when access to the dollar was not restricted. The CBN has settled a lot of outstanding dollar obligations which affected banks’ positions”.

According to Ezun, the banks were postponing settlement of dollar obligations during the crisis era, but those obligations are now cleared. ”There are no more outstanding obligations that will put pressure on banks’ dollar holdings. Those obligations are matured and fully settled by the CBN,” he said.

Confirming the rising dollar liquidity in the economy, Fitch Ratings said Nigerian banks’ ability to access dollar has improved considerably since the CBN introduced a foreign exchange “window” at end-April aimed at investors and exporters.

National Daily gathered that CBN’s creation of a market-determined foreign-exchange trading window for investors and exporters in April increased access to dollars and enabled banks to increase their spending limit while improving the dollar liquidity of the lenders.

ALSO SEE: UBA leads other banks, increases limit on Naira Cards to $2,000

This development has also enabled the banks in a stronger position to boost foreign exchange payments nationwide. The new international spend limits is coming on the heels of increased availability of foreign exchange in the economy.

For instance, FirstBank in its drive to promote convenience and ease of business for customers raised the limits on international transactions on Naira Cards to $1,100 monthly across ATMs, PoS, and online channels, with the daily ATM withdrawals raised to $300.

However, customers in UAE and China have a monthly limit of $250 for PoS and Online transactions. 

Similarly, Guaranty Trust Bank, raised the maximum amount a holder of its naira Mastercard can spend abroad in a month to $1,000 from $100. On the same vein, Ecobank Transnational Inc. had also raised their limit to the same amount while the First City Monument Bank (FCMB) Group will implement a new spending limit of $500 per month.

 

Advertisement

 

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.