Nigeria turns to Forex police, struggling to defend its currency

Chronic shortages of foreign currency, combined with increased demand for dollars caused the loss of 45% of the value of the naira on the black market.

Businesses’ hopes for a policy shift have been buoyed recently. With President Muhammadu Buhari, the policy’s architect, on extended medical leave in London, the central bank has boosted dollar sales to banks to relieve Nigerians needing foreign exchange to travel and pay school and medical bills.

Nigerian importers need foreign currency to pay bills, but dollars are scarce and only a few bank branches have bills to sell, which drives them to dealers on the black market.

In February, police caught smuggling $9 million, in a house in the northern city of Kaduna. The situation has become so desperate that hundreds of Nigerians took to the streets in Abuja and Lagos last month, demanding Mr. Bahuri to abandon his currency policy and reinvigorate the economy.

Mr. Buhari wants stronger naira, to quell rising inflation and build industrial base to diversify its economy away from oil.

Control over currency has become controversial even inside the Nigerian government, with reform-minded ministers calling for flexibility.

In recent days, hundreds of licensed money changers lined up in the hallways to provide weekly dwindling supply of dollars.

Read more:

• Risk off after the escalation in the Middle East, markets are recovering in a period of calm
• The macroeconomic events for today’s trading calendar
• The US government has confirmed the attacks, Trump is calling an emergency staff meeting
• Has the war between Iran and the US started?
• US markets remain under pressure, traders await Iran’s response