The
naira plunged against the US dollar on Monday after Nigeria’s government
scrapped its fixed exchange rate and allowed market forces to determine the
currency’s value.
“Trading
started at 9:00 am (0800 GMT) this morning. All the 24 commercial banks are
participating. The offer is 249 to 265 naira to the dollar,” one forex trader
told AFP.
At
1000 GMT, the naira was quoted at 262.50 against the dollar but the trader, who
asked to remain anonymous, said supply and demand were still in the process of
being matched. “All the bids will be put on the table and the rate will based
on the offers,” the trader said. Analysts say the naira may settle in at around
250, compared with 350 to the greenback on the black market.
Nigeria
had pegged the naira to the dollar at 197-199 since March 2015, even as other
oil exporters have let their currencies devalue in the wake of plunging global
crude prices.
President Muhammadu Buhari has previously said he would not
“kill the naira” by letting it devalue. But central bank governor Godwin
Emefiele said last week the currency market would now be “purely market driven”
as the country grapples with spiralling inflation, slowing growth, the
weakening naira and foreign exchange shortages.
-Vanguard
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