The Nigerian naira faces a challenge following the central bank’s acknowledgment of lower net FX reserves (USD 18 bln) than previously announced (USD 30 bln). The recently disclosed accounts revealed USD 7.5 bln in transactions with JP Morgan and Goldman Sachs and a nearly USD 7 bln exposure in foreign-currency forward contracts. Exceeding its lending limit to the government, the bank’s inability to up the currency supply has shifted demand to an unauthorized market where the dollar trades at an 18% premium. This disclosure has adversely affected Nigeria’s USD bonds, with a note due in 2051 dropping to its lowest value in a month.