Nigeria makes further efforts to defend currency

Nigeria makes further efforts to defend currency

Nigeria’s central bank has brought in further measures to support its currency, the naira.

Buyers of foreign currency must use that money within 48 hours or be forced to sell it back at the rate set by the central bank.

The naira hit record lows this week of more than 187 against the dollar at.

The prolonged fall in the oil price is causing serious problems for Nigeria, which is heavily dependent on the commodity.

Nigeria, which is Africa’s largest oil producer, receives 70% of government revenue and 90% of all foreign exchange earnings from oil.

The Central Bank of Nigeria (CBN) warned it would impose sanctions on anyone who did not follow its new rules.

Speculators are betting on further falls in the naira by buying foreign currency in the hope that they will be able to buy more when they reconvert their money back.

In November, the CBN devalued the naira to 168 against the dollar, but its action has not stopped it falling further.

Earlier this week, Nigeria was forced to revise its budget because of the dramatic fall in the price of oil.

Its finance minister, Ngozi Okonjo-Iweala, said its economy will now grow at 5.5% this year, rather than 6.4%.

Source: http://www.bbc.com/news/business-30548811

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