- UBA Joins Zenith, GTB to Cap International Card Spending Limits
The United Bank for Africa on Sunday announced it has reduced international spending limits on its Naira denominated cards due to the uncertainty surrounding the foreign exchange market.
The lender reduced its monthly spending limit to $500 and announced that the new limit has taken effect immediately.
In a note to customers, the bank said “In light of the changing economic climate and uncertainties in the Foreign Exchange market, we have had to review international card spending limits.
“The new applicable limit on your card is $500 monthly, this new rate has taken effect. Whilst we note this significant reduction from your previous spend limit, we would like to reassure you of our commitment to offering you the best rates in the industry.
“We apologise for any inconvenience this may cause and would like to thank you for your understanding at this time.”
This was after Guaranty Trust Bank and Zenith Bank announced they have capped international spending limits on their Naira denominated cards in March. Guaranty Trust Bank had reduced spending from $3,000 to $500 while Zenith Bank lowered its spending limit from $3,000 to $1,000.
The uncertainty surrounding the Central Bank of Nigeria’s ability to intervene at the foreign exchange market following the drastic decline in the foreign reserves continues to hurt market sentiment, especially with oil prices trading lower and demands for the commodity at a record low.
The nation’s foreign reserves depreciated from $38 billion in January 2020 to $34 billion in May despite the central bank devaluing the nation’s currency to curb rising capital flight. Foreign investors are said to be keen on getting out with traders at the non-deliverable fx futures contract already trading the Naira at N570 to a US dollar in a five-year contract.
Banks have now started managing their available foreign exchange to ensure they are able to service customers much longer.