Foreign investors are holding off on new investments into Nigeria until the its currency, the Naira finds some stability.

According to a source familiar with the matter, Foreign investors that thought the peak of the exchange rate would be N1,550/$ and came in have now picked mark-to-market losses on the currency.
They are touching their stop losses and are reversing their inflows. And we dont have the liquidity to support that.
A fresh inflow of around $700 million was expected to come but that has now been suspended as investors grow cold feet and fear losses piling over the Naira volatility.
Over a billion dollars of foreign inflows greased the foreign exchange market two weeks ago, after the Central Bank of Nigeria (CBN) began to push through long-awaited pending reforms in the market.
The reforms, which included more transparent pricing of the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) and higher interest rates on treasury bills, attracted dollar inflows and helped stabilise the naira after a period of turbulence.
However, it may not last, as the currency resumed its free-fall last week, closing at a new low of N1,665.50 per US dollar at the official market.
It however started to pare some of its losses in the parallel market towards the end of the week, appreciating to close on Friday, at N1800/$, after weakening to as low as N1900/$.
They set up stop losses at $/N1,700-1,800. There was no hedge, because they didnt think the naira would weaken so much; but with the alternative market touching $/N1,900 last week, they are nervous already, another source familiar with the matter said.
We cant afford them asking for their dollars now, it might be better to provide a Non-Deliverable Forward (NDF) for them, so that they can hedge against any future volatility, the source added.
According to a Director, Research and Strategy at Lagos-based investment bank, Chapel Hill Denham, The CBN was in the market again last week to sell about $85 million to the participating banks at the official market. That kind of development is encouraging, but it is not enough to stabilise the currency.
What is very important going forward is for us to see an increase in supply”, he stated.
Stabilising the naira will take higher interest rates, according to several analysts who spoke to newsmen ahead of a crucial Monetary Policy Committee (MPC) meeting on Monday and yesterday.
The expectation is for a 300 basis points hike in benchmark interest rates, as the CBN attempts to send a signal of monetary tightening in order to curb accelerating inflation. Headline inflation hit 29.9% in January, according to the National Bureau of Statistics, (NBS).
Some investors have insisted that market rates need to be above 20 percent at the minimum across all asset classes to encourage new dollar inflows.
There also needs to be a concerted effort to court investors, a senior banking source said.