Nigeria’s central bank will limit the amount commercial bank customers can spend abroad using their debit cards as part of a ploy to rescue the country’s struggling currency.
The move comes as part of a larger crackdown on dollar demand to save the country’s dwindling foreign reserves. Foreign investors started to sell off assets after a sharp will in the price of oil, and the Nigerian central bank is still struggling to prop up the naira.
While card transactions are carried out in naira, offshore vendors have to be settled in dollars.
Customers have previously had an annual limit of $150,000 to spend abroad on their debit cards, but regulators have yet to disclose the next planned cap.
After a meeting betweek central bank and commercial bank representatives, Union Bank chief executive Emeka Emuwa told reporters that “the limits would be reduced to more judicious levels,” Reuters reported.
The central bank also plans to ban corporate loan defaulters from the currency market, and has also fixed the rate at which banks can buy dollars from oil companies.
Foreign reserves in Nigeria have fallen 22 per cent to $29.6 billion as of April 7, compared to the same time last year. This is despite the fact that the the central bank devalued the naira last year and pegged the exchange rate in February.
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