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Zenith Bank pegs international withdrawal on naira cards amid dollar crunch

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As the race to buy foreign currency heats up, tier-1 lender, Zenith Bank has reviewed the international spending limit on the bank’s naira card to $1,000 per month.

In a notice to customers seen by BusinessDay, the bank said daily limits for withdrawals outside Nigeria have been set at $300, a move reminiscence of the strategy adopted by several banks in 2015 in the wake crude oil crash leading to an economic recession.

It is expected that other banks might follow Zenith as the effect of plunging oil prices bite harder across global markets.

The recent crash in the oil price which hit below $30 on Monday has continued to raise fears of a possible drop in dollar revenue which might lead to a halt in the support the Naira currency receives from the Central Bank of Nigeria.

The CBN fought off a naira devaluation for 15 long months before succumbing in 2016 after a foreign exchange demand backlog of $7 billion left the apex bank with no options.

There are fears the CBN could again resort to capital controls to resist devaluation before finally biting the bullet. Backed by high oil prices, the CBN has managed to keep the exchange rate stable for more than three years.

In a release, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) had assured that the size of the country’s foreign exchange reserves remains robust and comfortable noting that the apex bank remains able and willing to meet all genuine demand for foreign exchange for legitimate transactions.

As part of efforts to cushion the impact of plunging oil price and coronavirus on businesses, the Central Bank governor on Monday, announced six new policy measures which include; the extension of moratorium to one year on all principal repayments between March 1; reduction in interest rate on all CBN intervention facilities from 9 to 5 percent; creation of N50billion targeted credit facility for SMEs hard-hit by the impact of coronavirus; credit support for healthcare industry; regulatory forbearance; and strengthening of the loan-to-deposit ratio policy.