Nigeria seems confident its currency is on the rise, but will the good times last?
Lagos — Nigerian officials are increasingly confident the naira’s troubles are over for good. Some investors disagree. Portfolio inflows have risen in the past three months with crude prices increasing above $60 a barrel and money managers taking heart from a new foreign-exchange trading window, in which the naira has converged with the black-market rate. That prompted central bank Governor Godwin Emefiele and Patience Oniha, the head of Nigeria’s debt management office, to tell investors in London on October 27 that the currency was set to strengthen. Finance Minister Kemi Adeosun concurred, saying on November 2 the government sees no significant exchange-rate risk as it prepares to raise $5.5bn of Eurobonds. But Nigeria’s system of capital controls, multiple exchange rates and the trading window known as Nafex would struggle to survive a drop in oil revenue or sentiment turning against emerging markets, which may come as the US Federal Reserve raises interest rates, according to i...
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