stifled trading. The naira weakened 0.8 percent to 185 per dollar, extending losses over the past three months to 11 percent, the most of 24 African currencies tracked by Bloomberg.
The Abuja-based regulator last month told banks to clear foreign exchange
positions daily, having previously allowed them
net-open positions of 1 percent of shareholder funds. The move
has made it difficult for non-Nigerian investors to exit their
holdings, according to Samir Gadio, head of African strategy at
Standard Chartered Plc. “For those who remain in Nigeria, it’s become virtually impossible to get out,” he said by phone from London. “There’s a risk that these measures last as long as the central bank feels it doesn’t have the ability to control the exchange rate.”
Calls to the mobile phones of Ibrahim Mu’azu, a spokesman for the central bank, weren’t picked up and he didn’t immediately respond to e-mailed questions. The steps are short-term measures to stabilize the market, he said last month.
Naira Devaluation
Nigeria, which relies on oil for 70 percent of its budget and over 90 percent of exports, has been battered by Brent crude prices more than halving since June to under $52 a barrel. The central bank raised interest rates to a record 13 percent and devalued its target exchange rate for the naira to 5 percent
either side of 168 per dollar in November. Finance Minister
Ngozi Okonjo-Iweala proposed cutting this year’s budget by 8
percent. The Nigerian Stock Exchange All Share Index (NGSEINDX) plunged 4.2 percent, the most on a closing basis since March 2010, to 32,533.21. Volumes amounted to 66 percent of the three-month daily average. Nigerian Breweries Plc fell 9.6 percent for the biggest one-day fall since December 2004. United Bank for Africa Plc, the country’s third biggest bank by assets, slipped 7.4 percent to the lowest level since Dec. 22.
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