(Bloomberg) -- Nigeria’s central bank urged lenders to bolster their balance sheets in the face of high inflation, currency weakness and tepid economic growth.

“We must make difficult decisions regarding capital adequacy,” Governor Olayemi Cardoso said on Friday. “As the first steps, the central bank will be directing banks to increase their capital,” he told bankers during a dinner speech in the commercial hub of Lagos.

Nigeria’s biggest banks have recorded windfall profits from foreign-exchange revaluation gains due to the more than 40% devaluation of the naira against the dollar.

At the same time, some of the country’s biggest firms have suffered losses due to higher interest rates on dollar loans. That’s raised concerns that non-performing loans, which averaged 4.1% in June, could escalate.

Read more: Nigeria Asks Banks to Save Forex Gains Amid Currency Risks

The central bank in September directed lenders to build capital buffers with their foreign currency revaluation gains against the risk of an increase in bad loans. The average capital adequacy ratio for Nigerian lenders stood at 11.2% in June. The regulatory requirement is 10%, or 15% for lenders with international operations.

 

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