Forex scarcity: Banks cut customers’ limit on forex spending

Following the continuous reduction in foreign exchange supply by the  Central Bank of Nigeria (CBN), commercial banks have also notified their customers of a drastic reduction in their forex limit.
The new development implies that customers’ annual and daily limit on the use of their ATM cards and online transaction forex-denominated transactions have been drastically limited.
The CBN has been rationing dollar supply to banks, importers and Bureau de change in a desperate bid to curtail the nation’s foreign exchange reserves which has  continued to deplete and currently standing at about   $29bn.
The Naira in the last two weeks has maintained steady decline against major foreign currencies like the Dollar, the the British Pound Sterling and the Euro, with the Naira testing over N275 to the Dollar at the close of business last friday.
The cut by the banks on customers’ card spending in foreign currencies ranges from the annual $50,000 allowable  by the CBN to as low as  $5,000.
Skye Bank Plc, in an email notification which was also recieved by this reporter  slashed its international card spending limit from $50,000 to $12,000 annually, a maximum of $1,000 monthly and $100 daily.
Finding from our reporter also revealed that Standard Chartered Bank  notified its customers that from January 1, 2016, they will not be able to use their Naira de-nominated ATM cards for transactions that are de-nominated in foreign currencies, either locally or when they travel abroad. The bank blamed the development on  the limited foreign exchange supply in the financial market.
Reacting to this development, Barrister Ken Ukaoha, National President of the National Association of Nigerian Traders described the development as unfortunate.
He said: “the CBN is making it increasingly impossible to do anything outside the boundaries of this country. What has happened since the introduction of all the draconian restriction by the CBN is that we have moved from bad to worst which simply implies that what ever we are doing is simply not working.”
Kingsly Ibaji, an operator of a travel agency said: “what the CBN and the commercial banks are doing is to kick us out of business and completely destroy the hospitality business.”
Professor Ikechukwu Kelekume , a development economist with the Pan Atlantic University  in an exclusive interview with our reporter warned that the actions of the CBN is encouraging the breeding of an underground economy.
He said: “ people are piling up  their funds and routing them through the boarders in an apparent bid to find alternative ways to survive.

SOURCE: DAILY TRUST