CBN FOREX Interventions Pays off as Banks Raise Dollar Spending Limit on PoS, Online Transactions By 900%
Indications emerged on Tuesday that Commercial Banks have raised customers’ international Dollar spending limit on overseas Point of Sale (PoS) and online card transactions by 900 per cent.
The policy shift is expected to help travellers pay their hotel bills, make reservations and other transactions using their debit cards.
The decision to increase the spending limit followed improved Dollar liquidity in the market triggered by the Central Bank of Nigeria (CBN) sustained interventions. The interventions have yielded results and reduced foreign currency pressure on many lenders.
Also, the Investors’ and Exporters’ FX introduced on April 24 to attract foreign investors and boost the supply of Dollars has traded around $3.83 billion since it was established. It has also impacted on Naira’s stability and improved Dollar liquidity in the market, helping banks to review their Dollar spending positions.
In a report to customers titled: Upward Review of the International Spending Limit on Your Naira MasterCard; GTBank raised monthly Dollar spending limit on Naira MasterCard from $100 to $1,000 representing 900 per cent increase.
The Bank said customers could access the fund through Point of Sale (POS) and other online channels. The Bank however, said international cash withdrawal was still restricted.
Many of the lenders, at the height of forex scarcity, pegged monthly transactions on PoS and online transactions using cards at $100, British Pounds Sterling 90, Euro 130 and Canadian Dollars 360.
During the Dollar crisis era, many Banks encouraged travellers to open Dollar accounts, which have no spending limit. Such cards are issued by the Banks on domiciliary accounts funded directly by customers.
Confirming the rising dollar liquidity in the economy, Fitch Ratings said Nigerian Banks’ ability to access Dollar has improved considerably since the CBN introduced a Foreign Exchange “window” aimed at investors and exporters.
It admitted the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) mechanism, commonly referred to as the “Investors’ and Exporters’ FX Window”, is boosting foreign currency supply and the flow of Dollar liquidity into the banking system.