Nigeria’s Half-Measures on Currency Are Only Half-Working
- Bond funds staying away even as boutique investors dabble
- Free float needed to entice dollars, AllianceBernstein says
This article is for subscribers only.
A year after Nigeria scrapped a currency peg that sent foreign investors fleeing, it’s still battling to entice them back.
But trying to placate investors by introducing multiple exchange rates isn’t going to work, bond funds and Wall Street lenders including Citigroup Inc. say. To end the dollar shortage that has hamstrung West Africa’s biggest economy and oil producer, President Muhammadu Buhari and central bank Governor Godwin Emefiele will have to weaken the naira’s official rate again, or let it float.