Lower Crude Prices Heighten Risks To Naira

The Central Bank of Nigeria’s (CBN) measures put in place to curb foreign-currency borrowing by Nigerian lenders is threatening to halt Eurobond sales by banks in Africa’s biggest oil producer as lower crude prices heighten risks to the naira.

Banks would probably turn to rights offers and naira debt rather than selling dollar bonds, according to FBN Capital, the investment-banking unit of Nigeria’s largest bank by assets, Lagos-based FBN Holdings Plc.

Nigerian dollar notes lost 0.4 per cent this month, compared with a 2.2 percent average return among 57 emerging markets tracked by Bloomberg indexes.

Slumping oil prices are weighing on the outlook for Africa’s biggest economy, weakening the naira and eroding foreign-currency earnings.

SOURCE

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