Banks, firms in currency risk, capital erosion crisis as dollar hits N850

<p>• Suffer close to 50 per cent capital erosion in two months • ‘Basel compliance could impose recapitalisation option’ • Financial institutions in desperate moves to hedge FX liabilities • Competition for hard currency mobilisation intensifies • FX savings could go into liquidating dollar-denominated liabilities • Nigeria risks losing Africa’s biggest economy status</p>, <p>The falling naira has sent a shockwave across the market, throwing many bank chiefs off guard. Whereas the majority of the financial institutions hold foreign currency assets and liabilities, the latter outweighs the former for many in the group. In some cases, findings suggested, liabilities are twice the value of assets.</p>