In a bid to tighten liquidity in the country and conserve reserves, the Central Bank of Nigeria has curbed access to interbank currency market for the purchase of foreign currency bonds as well as a range of goods.
The Apex bank said importers could no longer get hard currency from the interbank market to buy items such as rice, cement, private jets, other construction materials, plastic and rubber products, soap, cosmetics, furniture and Indian incense.
Fears have been expressed concerning CBN’s decision, as analysts speculate that it may lead to diverting dollar demand to the black market, worsening perceptions about economic policy and delaying a decision to devalue the naira in the wake of weak oil prices.
“We see this policy move as confirmation that FX supply remains extremely tight. But more worryingly, it suggests that the central bank remains reluctant to devalue the naira,” said Yvonne Mhango, sub-Saharan Africa economist at Renaissance Capital.
The naira, which was trading at 198.50 on the interbank market, sold for 220 against the dollar at the black market in Lagos on Wednesday.
Currency and bond markets in the country has come under pressure since the price of oil plunged, with CBN spending $3.4 billion to prop up the naira since it fixed the exchange rate in February and tightened trading rules to curb speculation.