Nov 27 (Lagos) - Bank of America will halt Dollar supply to Angola at the end of this month, a move which is likely to pile more pressure on the Angolan Kwanza.



The Angolan Kwanza is in the same boat as the Nigerian Naira, it was devalued 30% officially over the last year and by much more in parallel markets.



Angola like Nigeria has suffered due to the sharp decline in crude oil prices over the past year.



The Naira has been devalued by 28% officially but in reality the devaluation is more than 40% as it trades at 242 against the USD at parallel markets currently.



The latest worry for Nigerians would be if Bank of America or other International banks would also stop supplying Dollars to Nigerian banks?



In a mind boggling move, the Central Bank of Nigeria chose to cut its benchmark lending rate by 15% earlier this week. Such a sharp cut in interest rates is sure to pile pressure on the Naira. While the interest rate cut helps borrowers it leads to a weaker currency a fact which is agreed upon by economists worldwide. So what was the CBN thinking when they made that decision? only they can tell you that. But when the Naira accelerates its free fall next month, don't expect the CBN to come to rescue going by their record over past few months.



If foreign banks stop supplying Dollars to Nigeria, we can expect the Naira to hit 300 in parallel markets in a matter of weeks if not days.





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