• Stanbic IBTC and Zenith Bank cut monthly card spending abroad to $500 and $200

• Foreign reserves fall by $3.5 billion in six months, down to $37.37 billion in June

• Central Bank steps up recapitalization, while banks face delays settling FX credit lines

Nigerian banks are tightening restrictions on international spending as foreign exchange pressures mount. On July 7, 2025, leading lenders Stanbic IBTC and Zenith Bank announced sharp reductions in monthly spending limits for foreign card transactions, citing the need to reduce risks tied to foreign currency payments.

Starting this week, Stanbic IBTC customers can now spend no more than $500 per month abroad, down from $1,000. Cash withdrawals outside Nigeria are capped at $100. Zenith Bank went even further, suspending all overseas ATM withdrawals and lowering the monthly spending cap to $200.

Zenith said this revision reflects the current economic realities, encouraging customers to switch to dollar-denominated prepaid cards.

Other banks including Ecobank and Fidelity Bank have also cut their limits on foreign transactions. It remains unclear whether the Central Bank of Nigeria ordered these restrictions, as it has not commented publicly.

The move comes amid declining foreign reserves and broader macroeconomic challenges. Nigeria’s external reserves stood at $37.37 billion at the end of June 2025, down from $40.88 billion in December 2024. This $3.5 billion drop over six months—representing a 19% year-on-year decline—was driven by external debt payments and interventions by the Central Bank to support the naira.

After a brief recovery in May, when reserves temporarily climbed to around $38.9 billion, the downward trend resumed. In the short term, authorities are banking on international loans expected in the second half of the year to slow the drain. However, the IMF projects reserves to decline further to $36.4 billion by the end of 2025, down from $40.2 billion a year earlier. This fall is linked to weaker oil prices, which dropped from $79.9 per barrel in 2024 to $67.7 in 2025, along with rising imports, high refinancing needs, and continued capital outflows driven by global uncertainty.

Several bank officials report that settling foreign credit lines now takes over six months. In response, banks are scaling back their exposure to dollar-based transactions.

Nigeria, which remains heavily reliant on oil exports, has yet to reopen its retail foreign exchange windows, which were suspended during the COVID-19 crisis.

Despite mounting external pressures, the Nigerian banking sector remains broadly stable. According to the IMF, the system has an average capital adequacy ratio (CAR) of 11.9%, above the regulatory threshold, and a non-performing loan ratio of 4.2%. However, analysts point to vulnerabilities in segments exposed to oil-related risks and government borrowers. To improve resilience, the Central Bank has launched a major recapitalization push and is shifting towards more risk-based supervision, particularly for fintechs and foreign currency exposures.

On the monetary front, the Central Bank has adopted a tighter stance, raising its key interest rate from 18.75% to 24.75% between mid-2023 and April 2025. The aim is to curb inflation—still high at 23.7% in April—and stabilize the naira in a foreign exchange market that remains volatile despite recent reforms. While banking system liquidity is considered adequate, defending reserves and restoring investor confidence remain top priorities.