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ATM Card Suspension: Banks Reject Naira for Visa Payment

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  • ATM Card Suspension: Banks Reject Naira for Visa Payment

Thousands of United Kingdom and Canadian visa applicants and intending travellers wanting to book hotels online were stranded on Monday as Deposit Money Banks stopped their naira debit cards from being used for dollar and other foreign currency-denominated transactions.

The DMBs had on Friday stopped their naira debit cards from dispensing dollars to customers via Automated Teller Machines in foreign countries, as well as disallowed the cards from being used for online and Point of Sale transactions.

The banks cited dollar scarcity and volatility in the foreign exchange market as reasons.

Guaranty Trust Bank, Standard Chartered Bank and Stanbic IBTC Bank have already stopped the withdrawal of foreign currencies from the ATMs by their customers who travel abroad and cut the value of their online and PoS transactions to $100 per month.

The development made the UK visa applicants wanting to pay the mandatory $118 for the six-month and $499 for the two-year visas through their naira debit cards to be stranded.

Payment for the UK visa is done online via the government-designated website.

Travelling agents and applicants said they could not complete the UK visa application procedures on Monday. They said payments with naira debit cards of Guaranty Trust Bank Plc, Ecobank Nigeria, United Bank for Africa Plc and other banks were declined.

It was further learnt that intending travellers and visa applicants wanting to make hotel booking online could not do so as their transactions via the naira debit cards were declined by the banks.

“This is terrible. I am finding it difficult to pay for my UK visa online. I have filled the form. I have got to the payment section and I was trying to pay online but the transaction was declined,” a visa applicant, who identified himself simply as John, told our correspondent at the UK visa application centre in Victoria Island, Lagos on Monday.

Travelling agents assisting the visa applicants to fill their forms said they found it difficult to make payment for UK and Canadian visas online using naira debit cards.

The Chief Executive Officer, Flying Partner, a Lagos-based travel agency, Mr. Kunle Oladele, said, “We could not make payment for the UK and Canadian visa applications online. The few payments we made were done through our partners in foreign countries, who used international debit cards issued by foreign banks.

“We called our partners in South Africa, UK and the United States to do so for us. It is very terrible. I am not sure we can continue like this. Canadian visa applicants will have to go to the country’s visa office now.”

Bank officials told our correspondent on Monday that they could not help the situation, citing the scarcity of dollars as the reason for the suspension of visa payment services.

“There is no dollar again in the country. There is nothing we can do about it,” an official of GTBank told our correspondent on the condition of anonymity.

Meanwhile, hundreds of customers besieged banking halls on Monday to apply for dollar debit cards, a day after the banks suspended naira debit cards from working overseas.

When our correspondent visited some bank branches, crowds of customers were seen filling forms to open domiciliary accounts and to obtain dollar debit cards.

Stanbic IBTC Bank and Standard Chartered Bank Nigeria had on Friday advised customers seeking to carry out transactions denominated in foreign currencies to apply for dollar or pound sterling debit and credit cards.

According to them, such cards will be linked to the customers’ domiciliary accounts.

In a notice to customers on Friday entitled: ‘Review of the international spending limit on your naira MasterCard’, GTBank stated, “We write to inform you of the monthly spending limit currently applicable when using your GTBank naira MasterCard for international payments via PoS and online.

“(The) previous monthly limit via PoS and online was $250; the new monthly limit via PoS and online is now $100. Kindly note that ATM cash withdrawal on your naira MasterCard is now only available in Nigeria.”

The development has also made students studying in the UK, US, Canada, Ukraine and other parts of the world to face more challenges getting their monthly stipends from their parents.

Most of the students had relied on ATM card withdrawals to get their monthly stipends from their parents before now.

Although other banks have yet to announce the suspension of ATM card services abroad, findings by our correspondent showed that many lenders had reduced drastically the amount that customers could withdraw via ATMs abroad.

The decision by some banks to suspend overseas ATM card services and online forex transactions came barely one week after the Central Bank of Nigeria, through the Bankers’ Committee, raised concerns about what it called the indiscriminate and suspicious manner in which some bank customers were spending dollars and other foreign currencies abroad through their naira debit cards.

Consequently, the regulator said it had concluded that bank customers who spent above the $50,000 annual forex limit it imposed would be barred from the forex market.

Dollar scarcity has been ravaging the economy after the price of crude oil, Nigeria’s main forex earner, crashed from $115 per barrel in June 2014 to around $51.4 per barrel currently.

The nation’s foreign exchange reserves have been depleting since then.

Last Wednesday, the country’s external reserves hit an 11-year low of $24.21bn, the latest data posted on the CBN website showed.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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