Indications have emerged that a number
of foreign banks have started suspending short and medium-term credit
lines to their Nigerian counterparts as falling crude oil prices
continue to fuel exchange rate volatility and uncertainties in the
economy.
This is coming just as several Nigerian
lenders are said to be seeking extension on the settlement of their debt
obligations to the foreign banks.
Top bankers told our correspondent on
Tuesday that the overseas banks had been expressing deep concerns about
the ability of Nigerian banks to continue to meet up with all their
foreign currency denominated credit lines, especially maturing Letters
of Credit, as the external reserves continued to be depleted due to
falling oil revenue.
The situation has been further worsened by speculations over the possible devaluation of the naira after the February elections
Foreign lenders reduce credit to Nigerian banks.
This, according to banking sources, has made some of the foreign banks to suspend credit lines to some Nigerian banks.
It was further learnt that the Central
Bank of Nigeria’s regulations aimed at curbing speculative attack on the
naira had led to some delays in accessing foreign currencies by the
banks.
This, and other related issues, have
forced some of the banks to seek extension of their debt obligations,
especially maturing LCs to foreign banks.
