CBN to defend reserves against UK $9b court ruling


The Central Bank of Nigeria (CBN) says it will strive to protect the country’s currency reserves after a British court ruling granted a small natural gas firm the right to seize $9 billion in assets from the Federal Government.

The huge cash would be one of the largest financial liabilities imposed on Nigeria in its history, representing 20 per cent of the currency reserves of Africa’s largest economy and top oil producer.

CBN Governor, Godwin Emefiele said the country had sufficient grounds to appeal the ruling, over an aborted gas project siated for Calabar, the Cross River State capital.

The court ruled on Friday in favor of Process and Industrial Developments (PID) 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 newsmen in Abuja.

Pressure has been building on the naira as oil prices drop and foreign investors lock in their profits on local bonds as yields have fallen from as high as 18 per cent a year ago.

As yields have fallen, foreign inflows have slowed, in turn leading to a shortage of dollars and hurting the naira.

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