(Ecofin Agency) - The improvement in foreign-exchange supply in the market has made Nigerian banks increase dollar spending limits for payment cards denominated in local currency by tenfold, Bloomberg reports.

Indeed banks like Guaranty Trust Bank, the country’s biggest bank by market value, increased the maximum amount its Mastercard holders can spend abroad in a month from $100 to $1,000. Ecobank Transnational Inc., also set a $1,000 per day limit from $100 while FCMB Group Plc., plans to start effecting its new spending limit of $500 per month, this week.

“The change in the withdrawal limit is another signal that banks are less concerned about foreign exchange liquidity than before,’’ London-based Exotix Capital said in a note to clients on July 14, 2017.

This new development put an end to suspension of foreign payments using Naira cards put in place by lenders in 2015 and 2016, due to foreign exchange reserves being slashed after a drop in price and output of oil, the country’s main export. However, the creation of a market-determined foreign-exchange trading window for investors and exporters in April by the Central Bank of Nigeria, increased access to dollars and allowed the banks increase their spending limit. It also improved the dollar liquidity of banks such as Ecobank.

“Ecobank’s slightly improved dollar liquidity has put it in a position to boost foreign-exchange payments nationwide,” Tunde Kuponiyi, the head of consumer banking at Ecobank, said.

Anita Fatunji