Here are banks that suspended foreign naira card transactions -

The persistent Foreign Exchange (FX) pressure occasioned by dollar supply shortage has resulted in many Nigerian banks suspending or reviewing down their international transactions on Naira cards.

Some of the banks include GTBank, Access Bank Plc, UBA, First Bank of Nigeria, Zenith Bank, and Ecobank, among others.

“I think this has to do with reduction in FX liquidity. The banks are not getting as much as they need and cannot be creating dollar liability for themselves,” said Ayodeji Ebo, managing director/CBO, Optimus by Afrinvest.

He explained that the supply of FX to the banks has continued to reduce.

On the implication of this development, he said people will switch to FinTechs that supply dollar cards and virtual cards, as well as open domiciliary accounts, which they can fund with dollar cash.

GTBank last week suspended its International transactions on Naira cards as seen in a statement issued to its customers, titled, “important update on your Naira card for international spending’.

The statement reads, “Dear customer, we write to inform you that you will no longer be able to use your Naira Mastercard for international online and POS transactions effective 31st December 2022. Kindly note that you can use your GTBank dollar card for all your international spending requirements.”

The bank said its dollar card allows ATM withdrawal of $1,000 daily or the equivalent in the transaction’s local currency and has no limit to international PoS or online transactions.

Some banks reviewed downward the usage of Naira debit cards overseas to $20 from $100 and finally to temporary suspension by banks.

The development has pushed the manufacturers who need dollars to import raw materials, to patronise the unofficial foreign exchange market known as the black market at a high cost.

What follows is that the margins of the manufacturers are squeezed resulting in inflationary pressures. At the end of the day the consumers bear the brunt as the cost of production is inputted in the price of goods.

The current situation is further explained by Taiwo Oyedele, head of tax and corporate advisory services at PwC, who said, “I believe this development is based on CBN’s directive which seems to be focusing on the demand side of the foreign exchange management”.

Unfortunately, he said the restriction will push more legitimate demands into the black market thereby pushing up the rate and widening the gap compared to the official rate.