Nigerian forex pressures will remain despite changes

Significance

This has temporarily boosted the supply of forex, causing the naira to appreciate in the parallel market around December. However, this proved short-lived, with the CBN resorting to various restrictions to protect forex supply and narrow the gap between the official and parallel rates.

Impacts

• New CBN curbs will likely prove ineffective as individuals and businesses find ways to keep trading and get a higher value for their forex.
• TransferWise and Azimo will likely try to secure relevant operating licences from the CBN after the latter declared them illegitimate.
• Foreign direct investment has surpassed foreign portfolio inflows over the last two quarters, but whether it can be sustained is unclear.