By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-
The Central Bank Nigeria (CBN) says it plans to limit the amount commercial bank customers can spend using their debits cards while abroad, a Reuters report quoted an industry group on Friday.
This is coming on the heels of latest crackdown on dollar demand to save its dwindling foreign reserves.
According to the report, CBN has been battling to prop up the naira after a sharp fall in the price of oil, Nigeria’s main export, which culminated a sell-off in assets by foreign investors.
Reuters said Emeka Emuwa, chief executive officer (CEO) of Union Bank of Nigeria Plc (UBN) disclosed after a meeting between the CBN and bankers committee that “the limits would be reduced to more judicious levels.
The current customers annual limit is $150,000; according to the central bank after the meetings with the bankers committee late on Thursday but did not disclose the new limit.
Emuwa said there’s been some arbitraging going on, “though card transactions were carried out in naira, offshore vendors had to be settled in dollars,” he added.
Also, the CBN said it would ban corporate loan defaulters from the currency market.
Following the naira weakness the central bank has also fixed the rate at which banks can buy dollars from oil companies.
The CBN had last November devalued the naira and pegged the exchange rate in February in order to curb speculation on the currency and save its dwindling foreign reserves.
Reuters reports that reserves have fallen 22 percent to $29.6 billion as at April 7, from a year ago.
The report affirmed that the Nigeria’s local currency has firmed sharply at the unofficial black market since this week to converge with the official interbank market at 197 to the dollar.
The development came after individuals who had stockpiled dollars to hedge against political risk ahead of March 28 presidential elections sold off their holdings when the feared violence and instability did not materialise.
It further reported that the naira weakness resumed on Friday with the local currency down to 205 at the black market, on thin dollar liquidity. “The naira traded at 199 on the interbank market, in line with the tight range within which it has traded since February when the central bank introduced a de facto peg after devaluation.
