External Reserves Hit Seven-Month Low – CBN…As Banks Tighten Forex Access

The Central Bank of Nigeria (CBN) said Nigeria’s external reserves hit their lowest level in seven months after falling to $38.57 billion as of May 25, 2022,
Figures obtained from the CBN revealed that the continued decline in the country’s external reserves used to defend the value of the naira is forcing banks to tighten access to foreign currencies for travelers and other legitimate users as the shortage grows. more feel.
According to figures obtained from the CBN on the evolution of external reserves, the reserves, which had been fluctuating for weeks, saw their lowest at $39.01 billion and $38.39 billion on October 10 and 8, 2021 respectively. .
Due to the scarcity, many banks are extending the waiting period to access forex for overseas travel, thereby denying travelers with urgent travel access to apply for the personal travel allowance or travel claims. business travel allowance.
Banks have also reduced the amount a customer can spend on dollar cards.
One of Nigeria’s leading banks, Ecobank, in a statement on Monday, had explained its current stance on retail foreign exchange transactions for international tuition fees, accommodation and maintenance payments as well as claims for PTA/BTA.
The statement from Head of Consumer Banking, Korede Adeniyi, said, “Due to current market trends, we require a 30-day window to process tuition, accommodation, and fees requests. maintenance.
“In order to ensure a smooth service and to enable timely disbursement of PTAs/BTAs, we ask that applications be submitted with the required documentation.”
Access Bank also explained its position in a letter to its customers on currency requirements for international tuition fees, maintenance payments and PTA/BTA applications.
He said that “all applications are reviewed to ensure they meet regulatory requirements. Also, due to the limited availability of foreign currency provided by the Central Bank of Nigeria, we require 30 days to respond to tuition, maintenance and rent payment requests.
“However, for PTA/BTA, we ask that you submit your application 14 days prior to your proposed travel date to allow for timely disbursement.”
First Bank had previously informed customers of the reduction in dollar access in a letter titled “Cross Border Naira Card Rate Reduction to $20”.
“Due to the current realities of the foreign exchange market, we have revised the cross-border transaction limits for the Naira Mastercard, Naira Credit Card, our Virtual Card and the Naira Prepaid Visa Card to $20 per month. This will come into effect on April 1, 2022. Additionally, international ATM withdrawals will not be permitted with our Naira cards at this time.
CBN Governor Godwin Emefiele, while giving reasons on the decline in reserves at the last meeting of the monetary policy committee, noted that gross external reserves had slightly decreased by $39.28 billion at the end of March 2022. .
“This was attributed to the small increase in reserves from exports and the high cost of importing refined petroleum products,” he said.

Shirlene J. Manley