To save its currency, Nigeria’s central bank wants people jailed for holding on to US dollars

Wednesday, November 16, 2016

Nigeria has tried a range of strategies to stem a trouble currency slide as well as manage its mounting economic crisis. The latest strategy could see it jail its own citizens.

The Central Bank of Nigeria (CBN) is looking to amend laws that regulate the local foreign exchange market. As part of its proposals (pdf), CBN is seeking extra powers to allow it “seize” foreign currencies in instances “where money is imported to sponsor terrorist activities or any other subversion activities to undermine the security of Nigeria.” But that request could be viewed as a cynical move to allow the bank, and the government, access funds in domiciliary accounts of private citizens in the name of national security.

 The key challenge for the Nigerian regulators is there continues to be a wide gap between CBN’s official exchange rate of around 305 naira to the dollar and the parallel markets’ street value of between 390 naira to 410 naira. It has created both uncertainty and a shortage of dollars in the system as investors and individuals sit on the sidelines to see how far the naira will fall.

Source: Quartz (link opens in a new window)