Foreign investors are holding back on new investments in Nigeria, awaiting stability in the country’s currency, the naira.
A projected inflow of approximately $700 million has been put on hold as investors express concerns about the volatile nature of the naira, fearing potential losses. Recent reforms by the Central Bank of Nigeria (CBN) injected over a billion dollars into the foreign exchange market, leading to temporary stability.
These reforms included transparent pricing of the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) and higher interest rates on treasury bills. However, the naira’s value plunged again last week, reaching a new low of N1,665.50 per US dollar in the official market.
Tajudeen Ibrahim, director of research and strategy at Lagos-based investment bank Chapel Hill Denham, emphasized the importance of increasing supply to stabilize the currency moving forward.
Source: Parrot Nigeria