Nigerian banks plan to reduce the amount customers can spend abroad using debit cards on Monday, two Banking institutions 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, the local unit of South Africa’s Standard Bank, 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 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 and Fidelity Bank — 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 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.