Nigerian Central Bank Starts Sale of Dollars to Clear Backlog

The Nigerian central bank has started to sell dollars in the spot market and forward operations to clear a backlog of demand for the greenback that has kept foreign investors trapped in Africa’s top economy.

The central bank sold foreign currency spot and 150-day forwards on Monday and Wednesday to corporates and investors that have waited for five months to get their money out of the country, according to two people with knowledge of the matter. They asked not to be named because they were not authorized to speak publicly.

The West African nation was hit by a severe shortage of dollars after the central bank stopped its weekly interbank foreign-currency sales in March to prevent a run on its reserves. The outbreak of the coronavirus and consequent lockdown of major economies led to the slump in the price of crude, which accounts for more than 90% of the nation’s foreign-exchange earnings.

In May, central bank Governor Godwin Emefiele told foreign investors seeking to repatriate funds to be patient and that authorities would put in place an orderly process for them to get their greenbacks out.

Central bank spokesman Isaac Okorafor could not immediately respond to several telephone calls and text messages seeking comment.

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