Nairametrics
  • Home
  • Exclusives
    • Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Ranking & Reviews
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • General News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Ranking & Reviews
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • General News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home General News

Nigerian Banks reduce dollar spending limits as forex scarcity rises

Olumide Adesina by Olumide Adesina
March 31, 2020
in General News
Nigeria’s GDP picks up to 2.28% y/y in Q3-19, Nigerian Banks reduce dollar spending limits as forex scarcity rises
Share on FacebookShare on TwitterShare on Linkedin

Many Nigerian banks are reducing how much foreign currency customers can spend abroad as concerns over the impact of the COVID-19 pandemic and drop in crude oil prices worsens Nigeria’s currency situation.

Guaranty Trust Bank Plc, the country’s biggest lender by market value, reduced international spending limits on its naira-denominated cards to $1,500 from $3,000 last week, while Zenith Bank Plc. reduced the limit to $1,000 from $3,000. Some media outlets report GTB reduced its limit to $500.

Also, Providus Bank, one of the more recent banking institutions also informed its customers that it will be restricting limits to $1,000 per month.

Just last week, the central bank “adjusted” the exchange rate between the naira and the US dollar from N307/$1 to N360/$1 at the official window while it moved the exchange rate for business travelers looking to buy forex from N360/$1 to N380/$1. This marked the first official devaluation of the naira since 2017.

READ MORE: Another crushing recession ‘is coming’

Why the restrictions: Analysts explain to Nairametrics that the recent devaluation or adjustment of the naira as the CBN will have it, could be the first round of currency depreciation expected in 2020. The exit of foreign portfolio investors from emerging markets like Nigeria is also expected to negatively impact the country’s external reserves.

Thus, banks may have decided to take precautions as the amount of dollars available for them to sell to their customers paying for transactions abroad may be declining.

The CBN is thought to have also restricted forex sales to BDCs following their requests further increasing dollar scarcity.

Nairametrics research also confirms the exchange rate at the parallel market is between N400 and N410 depending on who you are buying from and there is no guarantee that the seller actually has the dollar supply.
Blast from the past: This is not the first time the banks will be restricting dollar purchase for its customers.

READ MORE: Exploring branchless, other digital forms of banking in a crisis

In 2015 and 2016 when the oil price and output crashed, the central bank introduced controls to reduce dollar demand, prompting many lenders to either cut or suspend foreign payments for customers using their naira cards.

However, the measures taken then in 2016 came with damaging effects, as restricted access to dollars left businesses unable to import raw materials and locals unable to meet dollar-denominated expenses, including medical expenses and tuition at foreign schools.

Even while abroad, Nigerians still felt the brunt of the restrictions as banks placed spending limits on debit cards. The currency controls also had an adverse effect on investors as international airlines either pulled out or cut down on routes to Nigeria.

Related

Tags: Banks in NigeriaCBN Forex PolicyCoronavirusCrash in crude oil pricesexchange ratesforex restrictionsNigerian Business Newsparallel market

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Eco Bank
Access Bank
Bankers Committee
First bank


Flowmono

Bfpeer
Mega Millions
FCMB
Ikeja Electrics
Kwakol Markets




    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • Gains from Airtel pushes NGX ASI above 54,000 basis points
    • Elon Musk: NCC Confirms it has licensed Starlink for operations in Nigeria
    • UBA set to reward loyal customers in Super Savers Draw PRL

    Follow us on social media:

    Recent News

    Value of shares traded by top 10 stockbrokers up 133% despite COVID-19, investors, Raging Bulls lift Brent Crude price by 10%

    Gains from Airtel pushes NGX ASI above 54,000 basis points

    May 27, 2022
    Starlink

    Elon Musk: NCC Confirms it has licensed Starlink for operations in Nigeria

    May 27, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Ranking & Reviews
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • General News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com