Zenith, FCMB join GTBank, Ecobank to raise dollar-spending limits

In an apparent show of a return to foreign exchange liquidity Zenith Bank and First City Monument Bank Plc have joined Guaranty Trust Bank Plc and Ecobank Nigeria Plc, to increase spending limits on their payment cards abroad.

InsideBusiness gathered that E-mail statements and messages from the banks to their customers relish their current liquidity profile, asking customers to take up the opportunity.

Zenith Bank has increased its monthly limit on its Naira card to $1,000 while FCMB Group Plc has upped its limit from $100 to $500 per month while Ecobank Nigeria and GTBank revised their limits to $1,000 from $100.

Guaranty Trust Bank has also raised the maximum amount a holder of its Naira Mastercard can spend abroad in a month to $1,000 from $100, in line with the relative improvement in foreign-exchange liquidity in the market.

The moves by the banks, which have seen limits revised upward from $100 to $1,000, according to analysts, is as a result of improved foreign exchange liquidity since April when the Central Bank of Nigeria (CBN) introduced a new exchange window for importers and exporters.\

The foreign-currency supply gains from new exchange window have seen the local currency, the naira, appreciate from over N500 to the US dollar, four months ago, to an average of N365 to the dollar across the various windows of exchange.\

Most Nigerian lenders had in late 2015 through 2016 till recently cut or suspended foreign currency payments using locally denominated cards in 2015 as foreign exchange scarcity on the back of a decline in the price and output of oil, the country’s main export, which drastically reduced foreign exchange earnings for the country. This prompted the CBN to introduce controls to reduce dollar demand.

The reviewed spending limit is specifically a signal that banks are now less concerned about foreign exchange liquidity than before.

However, analysts are still concerned about the central bank’s capacity to intervene in the foreign exchange market on a the long term as oil prices and foreign exchange earnings have remained flat with oil prices hovering below $50, just few dollars above the $44.5 target for the 2017 budget.

Oil price inched to $49 on monday on slow down in the drilling of America’s shale oil. Development in Ecuador where the country has broken rank with OPEC output cut raises concern as it could trigger other countries taking a cue.

The naira  on Tuesday morning  opened trading at the I & E forex window at N362.21 to the dollar.  And around 12noon on Tuesday, the naira exchanged at a high of N376 at the  parallel market different from N347 it opened by 9am.