It seems Buhari’s efforts to defend the naira by increasing
spending and restricting the supply of foreign exchange to banks and their
customers is causing concern for foreign investors like JP Morgan Chase &
Co. Causing them to remove Nigeria from their local currency emerging market
bond indexes, in September, triggering a sell-off in the nations’ assets (I hope
y’all understood that cos I didn’t, I just heard some man say it on Bloomberg and
it sounded smart and just stuck with me).
Basically the exchange rate issue is the main thing bothering investors
because most of them have to transact in dollars and the restriction is causing
a delay in them getting their hands on the currency and thus causing a delay in
them paying their importers. Which is very bad for business because nobody likes to be paid late.
Companies like Heineken NV, Nigeria’s biggest brewer and Nestle SA
are a few that have been affect.
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