{"id":16345,"date":"2016-01-12T11:50:26","date_gmt":"2016-01-12T16:50:26","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16345"},"modified":"2016-01-12T11:50:26","modified_gmt":"2016-01-12T16:50:26","slug":"nigerian-currency-collapses-after-central-bank-halts-dollar-sales-to-stall-hyperinflation-monster","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16345","title":{"rendered":"Nigerian Currency Collapses After Central Bank Halts Dollar Sales To Stall “Hyperinflation Monster”"},"content":{"rendered":"

Nigerian Currency Collapses After Central Bank Halts Dollar Sales To Stall “Hyperinflation Monster”<\/a><\/h3>\n

Having told banks and investors\u00a0“don’t panic” in September<\/strong>,<\/a>\u00a0amid spiking interbank lending rates and surging default\/devaluation risks, it appears the\u00a0massive shortage of dollars<\/a><\/strong>\u00a0that we warned about in December has washed tsunami-like ashore in oil-producing Nigeria. Following the\u00a0Central bank’s decision this week to halt dollar sales to non-bank FX market operators<\/strong>, black market exchange rates spiked to 282\/USD (vs 199 official) and\u00a0CDS spiked to record highs implying drastic devaluations loom<\/strong>.<\/p>\n

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As Reuters reports,\u00a0Nigeria’s central bank is halting dollar sales to non-bank foreign exchange operators\u00a0<\/strong>and letting commercial banks accept dollar deposits with immediate effect, its governor said on Monday, in an effort to shore up dwindling foreign reserves.<\/p>\n

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Africa’s biggest economy, an OPEC member state that\u00a0depends on oil sales for about 95 percent of its foreign reserves<\/strong>, has been hammered by a collapse in global oil prices, which has triggered a slide in its naira currency.<\/div>\n

Godwin Emefiele said the sale of foreign exchange to bureaux de change would be discontinued because they were\u00a0using up the country’s foreign reserves for illegal transactions and selling the dollar at 250 naira compared to the official central bank rate of 197 naira<\/strong>.<\/p>\n

The currency hit a record low of 282 per dollar on the unofficial market on Monday<\/strong>\u00a0after the central bank’s announcement.<\/p>\n

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Emefiele said foreign reserves stood at around $28 billion compared with $37 billion in June 2014, and that the bureaux were depleting them at a rate of $28.4 million per week.<\/p>\n

“This is a huge haemorrhage on our scarce foreign exchange reserves, and cannot continue,”\u00a0<\/strong>Emefiele told a news conference in the capital Abuja.<\/p><\/blockquote>\n

To avoid devaluing the currency, a stance so far supported by President Muhammadu Buhari,\u00a0the central bank adopted increasingly stringent foreign exchange rules last year and effectively banned dollar access for the purchase of 41 items<\/strong>, which has also been criticised at the World Trade Organisation by the United States and the European Union.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Nigerian Currency Collapses After Central Bank Halts Dollar Sales To Stall “Hyperinflation Monster” Having told banks and investors\u00a0“don’t panic” in September,\u00a0amid spiking interbank lending rates and surging default\/devaluation risks, it appears the\u00a0massive shortage of dollars\u00a0that we warned about in December has washed tsunami-like ashore in oil-producing Nigeria. Following the\u00a0Central bank’s decision this week to halt […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[7418,130,200,284,413,534,571,600,11144,683,701,1555,7485,4318],"class_list":["post-16345","post","type-post","status-publish","format-standard","hentry","category-economics","tag-capital-markets","tag-china","tag-default","tag-european-union","tag-hyperinflation","tag-monetary-policy","tag-nigeria","tag-opec","tag-renaissance","tag-reuters","tag-saudi-arabia","tag-swiss-national-bank","tag-world-trade","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16345","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16345"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16345\/revisions"}],"predecessor-version":[{"id":16346,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16345\/revisions\/16346"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16345"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16345"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16345"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}