Nigerian banks reduce the amount you can spend abroad with your debit card

Nigerian banks have cut down on the amount customers can spend abroad using debit cards; in a bid to limit foreign currency settlement risk.

Africa's biggest market is facing dollar shortages because of the sharp fall in the price of oil, which is Nigeria's number one export.

Domestic banks are now trying to avoid transactions with hard currency, according to a Reuters report.

Stanbic IBTC Bank, the local unit of South Africa’s Standard Bank, was quoted in the story as saying it will halve the spending limit for offshore card transactions to $500 per month from Monday, July 20 and will limit cash withdrawals to $100.

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.

Ecobank and Fidelity Bank have also lowered withdrawal limits for individuals while abroad.

CBN Governor, Godwin Emefiele (center), Minister of Finance, Budget and National Planning, Zainab Usman (left) and Vice President Yemi Osinbajo. [Twitter/@NGRPresident] Pulse Nigeria

Moves like this have previously been at the behest of the central bank. At the time of reporting, it is still unclear if the regulator is behind this latest action.

The Central Bank of Nigeria (CBN) is battling to conserve dollar reserves that are down 19% from a year ago.

Last week the CBN 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.