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"don't Panic," Nigerian Central Bank Head Urges Banks

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http://www.reuters.com/article/2015/09/17/us-nigeria-economy-idUSKCN0RH1MH20150917

Nigerian central bank Governor Godwin Emefiele ruled out a naira devaluation on Thursday and told people not to panic about a government order which risks draining billions of dollars from the financial system.

In an interview with Reuters, Emefiele said he was ready to inject liquidity if needed into the interbank market, which dried up this week following the directive to government departments to move their funds from commercial banks into a "Treasury Single Account" (TSA) at the central bank.

The policy is part of new President Muhammadu Buhari's drive to fight corruption, but analysts say it could suck up as much as 10 percent of banking sector deposits in Africa's biggest economy -- playing havoc with banks' liquidity ratios.

With global oil prices tumbling, banks and companies are already struggling with the consequences of a dive in Nigeria's energy revenues that has hit the naira currency and triggered flows of capital out of the country.

Then JP Morgan kicked Nigeria out of its influential Emerging Markets Bond Index last week due to restrictions that the central bank imposed on the currency market to support the naira and preserve its foreign exchange reserves.

Since taking office in May, Buhari has vowed to rein in Nigeria's dependency on oil exports which account for 90 percent of foreign currency earnings. However, he has faced criticism from investors for failing to appoint a cabinet yet or outline concrete policies.

Amid confusion over the implementation of the single account policy, overnight interbank lending rates spiked to 200 percent, but Emefiele denied the policy had provoked a liquidity crisis.

The economy is full of pressure points!

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I have control of $14 Bn that the Nigerian National Bank is eligible to claim. It is in a Swiss account, formerly held by a Nigerian Emperor who died with no heirs or will. I believe the NNB should get it. I will charge a 1% agency fee for arranging this transfer and dealing with all the legal implications, plus disbursements, etc. If they are interested, I can send details of how to set up the transaction, subject to an advance payment of my fee. I can be contacted on +234 419 419 419

:rolleyes:

.

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Nigeria is the world's 21st largest economy. For context, Greece was around 45th last time I looked

Nigeria has also been tipped to have the fastest GDP growth in the world in the coming years

Does that make Nigeria big enough that trouble there could cause big ripples around the world?

Even though it has been fighting hard to become less corrupt, it is still near the bottom of lists on such matters

It is almost insignificant in oil supply terms globally and, despite what it says in the papers, oil isn't much more than 10% of its economy

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