In an effort to save the naira from further decline, the Central Bank of Nigeria (CBN), on Friday announced new measures to curb currency speculation.
The move comes after currency devaluation and a cut in the 2015 growth forecast and less than two months before general elections, with President Goodluck Jonathan trying to assure voters that Nigeria’s financial future remains healthy.
Customers who purchase foreign currency through the interbank market or an authorized trader must use the funds within 48-hours, said a statement issued by the CBN.
“Failing (this), such funds must be returned to the CBN for re-purchase at the bank’s buying rate,” it said, warning that sanctions would be imposed on those who fail to comply.
The measure targets speculators who seek profit by buying up foreign currency in hopes that the naira will continue to fall.
Nigeria, Africa’s largest oil producer, depends on crude exports for 70 per cent of government revenue and some 90 per cent of its foreign exchange earnings.
The government has said that plummeting crude prices have put huge strains on revenue and have announced a series of measures to respond to the crisis.
Last month, the CBN devalued the naira by eight per cent to a new target rate of 168 naira to the dollar. But the currency’s street value was much weaker than that, with a dollar fetching more than 180 nairas.
Jonathan warned on Tuesday that Nigeria could be forced to cut further the amount of oil revenue it uses for government spending if the global crude price continued to plummet.
Abuja sets a benchmark oil price, which has been slashed to $65 from $78 earlier this year. Revenue from oil exports up to that price go into general government spending.
Crude prices have halved since June. US benchmark West Texas Intermediate (WTI) for January delivery was trading at $54.84 on Friday, while deals for Brent crude for February were done at $59.59.
Finance Minister, Ngozi Okonjo-Iweala, this week slashed the government’s 2015 growth forecast to 5.5 per cent from 6.35 per cent.
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