The Central bank may be looking to cut dollar supplies to the market as its reserves run short, Bloomberg reports.
According to the report, Deputy Governor Sarah Alade told bank treasurers at a meeting on Nov. 13 that they should prepare for exchange-rate policies to remain in place for longer and that there are no plans to devalue the naira or to loosen currency-trading restrictions. The report further quotes a source as stating that the central bank will only sell as much dollars as it receives from oil exports, which amount to about $1 billion a month.
NBS said this week that Nigeria’s GDP grew by 2.8 percent, confounding analysts’ estimation of a further slow down in the economy due to the restriction of access to currency for traders by the CBN. Manufacturers who also depend on imported inputs felt the currency squeeze on their businesses.
As the CBN looks to ration dollar supplies, the outlook for businesses that depend on imported inputs do not appear very bright, and this could lead to further shrinkage of the manufacturing and trade sectors.
