Godwin Emefiele said Nigeria had sufficient grounds to appeal
the ruling, over an aborted gas project in the southern Nigerian
city of Calabar, made on Friday in favor of Process and
Industrial Developments Ltd.
"We know that the implication of that judgment has some impact
on monetary policy and that is why the central bank is going to
step forward and ... defend the reserves," Emefiele told
reporters in the capital, Abuja. The sum of $9 billion is some
20% of Nigeria's foreign reserves.
Pressure has been building on the naira <NGN=> as oil prices
drop and foreign investors book profits on local bonds in
response to yields which have fallen from as high as 18% a year
ago. A dollar shortage was initially caused by a slowdown of
foreign inflows after local debt market yields declined.
In a further sign of pressure on the currency, President
Muhammadu Buhari last week told the central bank to stop
providing funding for food imports, his spokesman said.
However Emefiele did not say what other measures the central
bank might take to defend the country's currency or its foreign
Nigeria operates a multiple exchange rate regime that it has
used to manage pressure on the currency. The official rate of
306.90 to the dollar is supported by the central bank, but the
traded rate of 364 is widely quoted by foreign investors and
Last week, Emefiele met fund managers in London in a roadshow
arranged by South Africa's Standard Bank <SBKJ.J> following its
second debt auction that week, where the central bank told
dealers to raise rates.
The fund manager told Reuters investors were focused on the oil
price and the bank's policy on debt sales.
(Additional reporting by Chijioke Ohuocha; Editing by John
Stonestreet and David Holmes)
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