The United Bank for Africa Plc has informed its numerous customers that they “will no longer be able to use their Naira card for ATM, POS or online International transactions effective from 15th of January, 2023.
What this means is that customers must source their foreign exchange needs wherever they they can, from outside the banking system, and bring such forex to the bank for the bank to transfer for them. For now, the alternative that customers is buy foreign exchange from the parallel market otherwise known as the black market where rates are about 70% higher than the CBN window. Presently, while the official exchange rate from the CBN is about N449/$ the parallel market rate is more than N750/$.
The danger is that sourcing forex from outside the banking system adds additional cost to users as they have to pay handling charges and other bank costs, making the total rate much more than N750/$. In addition, this is projected to push the parallel rate higher as everyone from now on approaches the open market, bidding freely to get foreign currency at any rate, for their international spending.
The bank advised its clients to use a UBA Dollar, Pounds or Euro Card linked to a foreign currency account or a UBA Dollar Prepaid Card which is not linked to an account, for international transactions.
Zenith Bank, GTBank and other banks had earlier sent similar messages to their customers. In all it is a symptom of the economy’s declining performance and the CBN’s failing struggle to find a lasting solution to the Nations’s economic malaise and the dwindling value of the National currency.