CBN Explains Ban on ATM Use Abroad (Details)

Nigeria’s Apex bank,The Central Bank of Nigeria says it has no power to reverse the restriction placed on the use of Automated Teller Machine cards abroad.

The CBN said it Is in support of the Deposit Money Banks’ decision to place restrictions on the use of ATM cards abroad.

According to the CBN, the move will help in reducing the pressure on the naira which has become necessary due to a scarcity of foreign exchange.

Moses Tule, Director, Monetary Policy Department at the CBN while speaking with journalists over the weekend, explained that the restriction may continue until the country is able to increase its foreign exchange earnings.

“The limitation on the use of debit or credit cards outside the country was not a limitation that was placed by the CBN.

“They were restrictions that Deposit Money Banks placed because they have to settle whatever transactions you make with your debit cards with their corresponding banks in foreign currency. And if the banks do not have the foreign currency to do that, then you create a liability problem for them.”

“Given the level of current flow into the reserves, by the time we meet these priority areas, you will discover that people who are using their debit cards overseas for shopping can never be on the priority list,” he added.

“If you read the budget speech of the President, there was one sentence there where he said we must make hard choices in 2016. The budget is designed to open the growth potential of the economy and the President has said we must make hard choices.

“As policymakers, we are going to make those hard choices so at the right time, the CBN will take the appropriate decisions that will strengthen the foreign exchange market.”