Nigeria's apex bank calls forex policy critics 'unpatriotic'

Nigeria's government has come under intense criticism for propping up the naira at 305-315 to the dollar.

CBN Governor Godwin Emefiele and President Muhammadu Buhari

Nigeria's government has come under intense criticism for propping up the naira at 305-315 to the dollar and introducing tight capital controls in response to the country's worst economic crisis in decades.

The policies have led to a foreign exchange shortage, with many local businesses being forced to buy dollars on the black market, where the rate is scraping 490 to the dollar.

"Intelligence reports at the disposal of the bank reveal the involvement of some unpatriotic elements funding the push to have the CBN and the federal government reverse its forex policy," said the bank's spokesman Isaac Okorafor.

Okorafor said that a weak naira would only hurt the country's poor, adding that the bank was committed to ensuring that "the masses of our country's low income earners are protected from the vagaries of high naira depreciation".

The ratings agency Fitch downgraded the outlook on Nigeria's long-term debt this week, citing "tight foreign exchange liquidity" as an impediment to growth.

In a note sent to investors, Standard Chartered Bank economist Razia Khan said that it was unlikely that the foreign exchange market would be liberalised soon.

"For now, the only clear takeaway is that there are no imminent plans for further FX liberalisation," Khan said. "FX will continue to be rationed."

Falling global oil prices and repeated attacks on crude infrastructure in Nigeria's south severely hit the country's economy in 2016, sending it into its first recession in decades.

Nigeria, which gets over 70 percent of its revenue from oil, is now suffering from a debilitating shortage of foreign exchange, hitting imports and overseas investment.

Fitch said that Nigeria would continue to suffer low growth if foreign exchange continued to be in short supply and if the government could not narrow the fiscal deficit.

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