Nigeria’s dollar scarcity is no longer news.
From reducing spending limits on international transactions via your naira debit card, banks are now suspending the transactions altogether.
Our fx shortage woes are not new. Because the Central Bank of Nigeria (CBN) practices a managed exchange rate regime, it draws on our external reserves to maintain the price of the currency at a predetermined value. This is not entirely problematic, as leaving the market to determine your currency's price can lead to a lot of volatility, making it difficult for businesses and investors to plan. However, the CBN’s approach to managing the naira's price can be described as unorthodox since it no longer attempts to control supply but demand as well.
In a simpler world, exchange rate management is typically done by raking up large reserves (Saudi Arabia, for example, has roughly $450 billion in reserves versus Nigeria’s $38.5 billion).