Unintended Result of Nigerian Dollar Hunt Is Naira Shortage
- Currency regulations threaten to curb economic growth
- May & Baker is cutting production to cope with rising costs
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First Nigerian businesses were hit by a dollar shortage. Now there aren’t enough naira.
A central bank requirement that companies back forward dollar purchases with naira is drying up supplies, helping to underpin a 2.1 percent gain since the local currency fell to a record low against the greenback on Aug. 9. At the same time, an increase in government borrowing is spurring banks to invest in the safety of sovereign debt rather than lending to businesses or consumers, also draining cash out of the system.