Commercial banks to raises Customers’ International Dollar spending to $3,000

Commercial banks are planning to raise customers’ international dollar spending limit on overseas Point of Sale (PoS) and online card transactions to $3,000, our correspondent gathered during the weekend.

The decision to increase the overseas PoS and online spending limit followed improved foreign exchange liquidity in the market triggered by the Central Bank of Nigeria (CBN)-sustained interventions.

The apex bank foreign exchange intervention has yielded reduced foreign currency pressure on many commercial banks.

Speaking with Nigerian NewsDirect during the weekend, the Head of Treasury at Ecobank Nigeria, Olakunle Ezun, said nearly all commercial banks had increased their foreign spending, attributable to CBN’s intervention in the foreign exchange market.

According to him, “the reason commercial banks stop foreign spending on PoS and Online then was because the nation’s economy had foreign exchange crisis.

“A lot of banks reviewed their foreign spending because of supply. But you will agree with me that the business environment has changed, especially in the foreign exchange market.

“Commercial banks are now enjoying improved dollar liquidity which prompted them to review spending limit on PoS and online transactions.

According to Ezun, Ecobank PoS and online international spending is hovering between $1,500 and $2,000, depending on the transaction.

“Since GTBank has increased its international spending, certainly other commercial banks will follow in order to win customers,” he explained in a telephone chat with our correspondent.

A report by FMDQ OTC states that foreign exchange market turnover in June was $19.80billion, a 34.04per cent or $5.03billion increase from the turnover recorded in May ($14.77billion).

“Turnover at the Investors & Exporters (I&E) FX Window in June was $3.93billion, representing a 38.59per cent or $2.47billion Month-on-Month decrease from the value recorded in May ($6.40billion), and resulting in a decrease in its contribution to the total foreign exchange market turnover to 19.85per cent from 43.33per cent in May,” the monthly report by FMDQ OTC explained.

FMDQ OTC disclosed that the total turnover at the I&E FX Window for first half of 2018 increased to $30.28billion.

Also speaking on the increased dollar spending, The President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, at the weekend, said the recent CBN policy on rate convergence has resulted in higher dollar liquidity in the foreign exchange market, stressing that the increased spending limit is expected to  enhance the stability and availability of dollars.

According to him, “The recent CBN policy of rate convergence between the BDC operators and commercial banks has resulted in higher dollar liquidity in the market with a very narrow margin.

“It is therefore not surprising to see banks reviewing their limits on POS and cards money to their customers as a means of uploading their dollars position to their clients.

“The new drive of Guaranty Trust Bank is at their discretion and will definitely enhance the stability and availability of dollars in the foreign exchange market.

“As usual the trajectory will be follow by all banks soon.”

Guaranty Trust Bank in a report to customers entitled: ‘Upward Review of the International Spending Limit on Your Naira MasterCard’, raised monthly dollar spending limit on naira MasterCard from $1,000 to $3,000 representing 200 per cent increase.

According to the lender, “We would like to inform you of the monthly spending limits on your GTBank Naira MasterCard have been reviewed to $3,000 from $1,000 for your International Online and POS transactions.

“Kindly note that International ATM cash withdrawal is still restricted,” the statement added.

The policy shift is expected to help travellers pay their hotel bills, make reservations and other transactions using their debit cards online.

Hitherto, Nigerian banks had announced the suspension of their overseas Automated Teller Machine card services

Also suspended by the banks were all foreign currency-denominated transactions, including those conducted on PoS machines and online.

Confirming the rising dollar liquidity in the economy, The CBN governor, Mr. Godwin Emefiele at the end of July Monetary Policy Meeting (MPC) noted the positive impact of the sustained improvement in foreign exchange supply on the performance of manufacturing and other key sectors of the economy.

According to him, “The Committee noted with satisfaction, the relative stability in the foreign exchange market and high level of activities, particularly, at the Investors’ and Exporters’ (I&E) window.

“The Committee observed that rates in the foreign exchange market have remained relatively stable in near term, supported by continued intervention in the market by the Bank, sustained increase in the price of crude oil in the international market, as well as positive developments in the external sector,” he explained in his communiqué.

Fitch Ratings had 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.”


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