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Nigerian currency control fears | Nigerian currency control fears |
(1 day later) | |
Financial analysts in Nigeria say the central bank's attempts to stabilise the currency may deter future foreign investment. | Financial analysts in Nigeria say the central bank's attempts to stabilise the currency may deter future foreign investment. |
Since Tuesday the Central Bank of Nigeria (CBN) restricted sales of dollars to companies who could prove they had a transaction requiring them. | |
The move is intended to squeeze out currency speculators and halt the slump in the value of the naira. | The move is intended to squeeze out currency speculators and halt the slump in the value of the naira. |
The governor of the central bank says the move is "temporary". | |
"It may be weeks, it may be months, but I can't see it lasting much longer," Charles Soludo was quoted as saying. | |
The naira has lost 20% of its value against the dollar in recent months. | The naira has lost 20% of its value against the dollar in recent months. |
The fall is because of the reduction in the price of oil, Nigeria's biggest foreign exchange earner. | The fall is because of the reduction in the price of oil, Nigeria's biggest foreign exchange earner. |
'Possible risk' | 'Possible risk' |
"There's a lot of nervousness among investors about these measures," Matthew Green of the Financial Times told the BBC's Network Africa. | "There's a lot of nervousness among investors about these measures," Matthew Green of the Financial Times told the BBC's Network Africa. |
For now there is still a free flow of investment, he said. | For now there is still a free flow of investment, he said. |
"It's the very idea that sometime in the future there's a possible risk investors won't be able to get their money out." | "It's the very idea that sometime in the future there's a possible risk investors won't be able to get their money out." |
A lot of foreign investment has already left Nigeria over the last year. | A lot of foreign investment has already left Nigeria over the last year. |
"The question is will Nigeria be the kind of place they want to come back to?" said Mr Green. | "The question is will Nigeria be the kind of place they want to come back to?" said Mr Green. |
The man in the street | The man in the street |
Nigeria's economy is heavily based on imports. | Nigeria's economy is heavily based on imports. |
The drop in the Naira's value means imports are more expensive. | The drop in the Naira's value means imports are more expensive. |
An attempt to slow this cost of living increase may mean that foreign exchange controls are popular with Nigerians, despite the effect on foreign investment. | An attempt to slow this cost of living increase may mean that foreign exchange controls are popular with Nigerians, despite the effect on foreign investment. |
But currency dealers are trying to lobby the governor of the central bank to prevent further controls being placed on foreign exchange trading, Reuters news agency reports. | But currency dealers are trying to lobby the governor of the central bank to prevent further controls being placed on foreign exchange trading, Reuters news agency reports. |
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