Naira Struggles: Nigeria’s Response to the Crude Oil Price Shock of 2014

  I wrote an essay on Nigeria’s foreign exchange struggles since the last crude oil boom ended in 2014. Worth reading if you want a bit of context on how we got here and what we should be doing next. Note: It was written before the “windows” policy was implemented but the inference is still… Continue reading Naira Struggles: Nigeria’s Response to the Crude Oil Price Shock of 2014

Naira struggles: And another one….

This is really becoming tiring but we must. The central bank announced yet another intervention program disguised as a policy yesterday. The policy may be in response to marching orders received by the central bank governor during the last FEC meeting to reduce the spread between the interbank and black market. The spread has risen… Continue reading Naira struggles: And another one….

The political economy of BDCs and black market premiums

We seem to fall into a recurring cycle of bad policy with regards to the foreign exchange market. It is possible that policy makers implement bad policy by accident. However it is also possible that policy makers implement bad policy by design. Could bad policy in the foreign exchange market be the result of political… Continue reading The political economy of BDCs and black market premiums

Free at last

The central bank finally provided details of its new foreign exchange policy which is set to kick off on Monday. Finally the currency peg is gone and, in a positive surprise to almost everyone, the price fixing is also gone. In summary, the central bank will no longer attempt to directly fix exchange rates and… Continue reading Free at last