Fun

Moody’s Says Forex Shortages May Force Nigerian Central Bank to Delay Repaying Local Banks

News Feed - 2023-02-18 06:02:38

Moody"s Says Forex Shortages May Force Nigerian Central Bank to Delay Repaying Local Banks


The persistent scarcity of foreign exchange may force the Nigerian central bank to delay repaying the $10.4 billion owed to local banks, analysts at Moody’s Investors Service have concluded. The central bank’s failure to pay its debts on time will likely force the affected financial institutions to similarly delay paying back their own forex-denominated debts. Nigeria’s Declining Oil Revenues


Nigeria’s perennial shortage of foreign exchange may likely result in the country’s central bank failing to repay domestic lenders on time, the rating agency Moody’s Investors Service has said. As reported by Bloomberg, the Central Bank of Nigeria (CBN) owes the West African nation’s so-called rated commercial lenders about $10.4 billion which the bank received in the form of swaps and forwards.


According to Moody’s analysts that include Mik Kabeya and Lynn Merhi, the anticipated central bank debt repayment delay may similarly force the affected banks to delay settling their own offshore obligations.


“A material delay in repayment could well lead to the banks facing their own foreign-currency shortages and could constrain their ability to repay their own foreign-currency liabilities,” the analysts reportedly said.


Despite being one of Africa’s biggest oil producers, Nigeria’s oil revenues have gradually declined from a peak of $62 billion seen in 2008 to $36.6 billion seen by December 2022. This sharp drop in revenues, which is blamed on oil theft and vandalism, has in turn increased pressure on Nigeria’s forex reserves.


Persisting Local Currency Shortages


The prospect of the CBN delaying repayment its debts comes at a time when Nigeria is also grappling with shortages of local currency. The shortages stem from the CBN’s so-called naira redesign policy — an initiative which, in part, seeks to starve the country’s forex of naira banknotes.


However, reports and scenes of Nigerians storming and vandalizing banks eventually forced the country’s president, Muhammadu Buhari, to extend the life of the recently demonetized naira banknotes. In his televised address to Nigerians on Feb. 16, Buhari said he had extended the life of the old 200-naira notes by 60 more days.


In the address, President Buhari insisted the naira redesign policy is a necessary step that had to be taken in order to strengthen the monetary policy. The Nigerian leader also cited money laundering and terrorism funding concerns as some of the reasons why he okayed the CBN’s currency demonetization exercise.


Register your email here to get a weekly update on African news sent to your inbox:

Tags in this story Central Bank of Nigeria (CBN), forex black market, Monetary Policy, Money Laundering, naira demonetization, naira redesign, President Muhammadu Buhari, terrorism financing


What are your thoughts on this story? Let us know what you think in the comments section below. Terence Zimwara


Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route. Report: FTX Promised High Earnings to African Students That Successfully Recruited Fellow Learners AFRICA | 13 hours ago Income Movement Rightfulshare Says It Has Launched "First Unconditional" Crypto UBI in South Africa AFRICA | 3 days ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleColombian Court Holds Hearing in the Metaverse Next articleBill Allows Russian Financial Platforms to Operate Blockchains, Issue Digital Assets Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItSEC Risks Violating Admin Procedure Act by Rejecting Spot Bitcoin ETFs, Says Grayscale


Grayscale Investments" CEO explains that the U.S. Securities and Exchange Commission (SEC) could potentially violate the Administrative Procedure Act by not approving a spot bitcoin exchange-traded fund (ETF). SEC Approving Spot Bitcoin ETF Is "a Matter of When and Not ... read more.Bitcoin ATM Operator Indicted in New York Allegedly Running Illegal Business Attracting Criminals Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto

News Feed

Onecoin Head of Legal and Compliance Charged for Role in Crypto Pyramid
Onecoin Head of Legal and Compliance Charged for Role in Crypto Pyramid Authorities in the U.S. have announced charges against a former Onecoin executive for her alleged role in th
Ethereum’s Large Consolidation Trend Points To Possible Price Explosion To $8,000
Este artículo también está disponible en español. Although Ethereum is currently up by about 46% from the starting point at the beginning of 2024, December has been under
Turner Wright4 hours agoDigital Currency Group files motion to dismiss Gemini lawsuit, claiming it’s a PR campaignGemini’s complaint filed in July alleged DCG and Barry Silbert had made “false, misleading, and inco
UAE residents can now trade crypto directly with their bank accounts
Ezra Reguerra4 hours agoUAE residents can now trade crypto directly with their bank accountsThe new integration enables the direct conversion of UAE dirhams into Bitcoin and Ether using M2’s spot market.3408 Total view
Report: Russia Remains a ‘Key Market for Crypto,’ Commands the 3rd Largest Bitcoin Hashrate in the World
Report: Russia Remains a "Key Market for Crypto," Commands the 3rd Largest Bitcoin Hashrate in the WorldThe fervor for cryptocurrency assets in Russia has grown wild over the last f
PSF Token Invokes the First Coin-Age Staking Protocol on Bitcoin Cash
PSF Token Invokes the First Coin-Age Staking Protocol on Bitcoin CashDuring the last six months, the Simple Ledger Protocol has grown immensely and there’s been 9,604 SLP toke
Commodity Analyst: ‘I Don’t See What’s Going to Stop Bitcoin From Appreciating’
Commodity Analyst: "I Don"t See What"s Going to Stop Bitcoin From Appreciating" A senior strategist with Bloomberg Intelligence says that he does not see what&rs
As Lightning’s Economy Takes Shape, Devs Are Split on Proposed Fee Hike
Fees aren’t just a topic of discussion for bitcoin users anymore. As the tech matures and an economy develops, fee discussions are making their way into the lightning network too.
Slovenia Prepares to Impose 10% Tax on Spending and Selling Cryptocurrency
Slovenia Prepares to Impose 10% Tax on Spending and Selling Cryptocurrency The tax authority of Slovenia has put forward a proposal to change the crypto taxation rules in the count
Nivesh Rustgi6 hours agoXRP price searches for a fresh bullish catalyst to trigger a move above $1XRP’s price rallied in excess of 100% after Ripple’s victory last week, but do fundamentals support a move to $1 and b
Stablecoin BUSD’s Supply Shrunk by 3.24 Billion in 3 Days, Market Cap Is Down 20% Since Last Month
Stablecoin BUSD’s Supply Shrunk by 3.24 Billion in 3 Days, Market Cap Is Down 20% Since Last Month While billions of dollars in crypto assets have been withdrawn from Binance, th
Lawyer Who Represents Victims of Alleged Spanish Crypto Ponzi Says It Could Be the ‘Biggest One’ in the Country
Lawyer Who Represents Victims of Alleged Spanish Crypto Ponzi Says It Could Be the "Biggest One" in the Country The Arbistar case victims’ defense lawyer c