Nigeria's Emefiele to Reconsider FX Controls as Demand Drops

Nigeria’s central bank Governor Godwin Emefiele said he will consider easing restrictions on currency trading in Africa’s biggest oil producer if demand for foreign exchange drops further.

The controls are necessary and are working to limit demand for dollars, Emefiele told delegates at a conference on Africa hosted by the Financial Times in London on Monday. The central bank had little choice in imposing the curbs in order to preserve foreign-currency reserves, he said.

“Once we have achieved a result we can allow ourselves to look at a freer market,” the governor said.

Emefiele imposed restrictions on trading and introduced bans on purchases of dollars by certain importers after the naira plunged to a record low in February following a drop in oil revenue. With the backing of President Muhammadu Buhari, Emefiele has resisted calls to ease the controls and devalue the naira despite criticism from investors, businesses and fellow members of the Monetary Policy Committee. The restrictions have reduced liquidity, prompting JPMorgan Chase & Co. to remove the nation’s bonds from its emerging-market bond indexes last month.

“I think it’s working and I think you should be patient with us,” Emefiele said. “Demand for foreign exchange has dropped.”

The naira has traded at an average of 198.91 per dollar on the interbank market since the beginning of March after reaching a record low of 206.32 on Feb. 12.

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