Nigeria's Central Bank bans 9 local banks from trading forex

Nigeria's Central Bank has banned nine local banks from trading in foreign exchange, accusing them of withholding $2.1 billion in government funds.

The Central Bank on Tuesday said it would punish banks accused of withholding the money belonging to the state oil company that was to be paid into a single account last year. The effort to fight corruption has deprived most banks of funds.

Nigeria's oil-dependent economy is in recession because of low petroleum prices and resulting foreign currency shortages that have the naira trading officially at 303 to the dollar and at 400 on the parallel market.

One of the affected banks, First City Monument Bank, blames the "dire macroeconomic situation ... rather than concealment or willful non-compliance."