Economics
Nigerians Shun Naira for Foreign Currencies to Store Wealth
- Report links currency substitution to Nigeria naira volatility
- Nigerians’ use of dollars exceeds IMF’s 30% threshold
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Nigerians have been accumulating foreign currencies to protect their wealth from naira volatility and surging inflation, according to a research paper in a journal published by the Central Bank of Nigeria.
“Higher real-exchange rate volatility is associated with an increased level of currency substitution,” central bank economists including Isaiah Ajibola, Sylvanus Udoette, Rabia Muhammad and John Anigwe said in the paper available on the central bank’s website. There is a need to contain “exchange-rate volatility and inflation as a way of curbing the spate of currency substitution in the country,” they said.