5 December 2017

Nigeria: Official Naira Rate Drops to N307/U.S.$

The Central Bank of Nigeria (CBN) on Monday sold the dollars at N307 to the dollar for the first time on the official interbank market, according to the FMDQ OTC.

Traders said the development could signal a gradual move to merge its multiple exchange rates.

Nigeria's convoluted exchange rate system has been used to manage what the central bank described as "frivolous" demand for dollars at the peak of a currency crisis which began two years ago.

The West African country now has at least five exchange rates including the official one which the Bank used to mask pressure on the currency. In April, it allowed foreign investors to trade the naira at market determined rate, which has weakened the currency to around N360 to the dollar.

"It's possible the central bank is working towards a gradual convergence of rates, one trader told Reuters.

Earlier this month, the Bank sold dollars at N306 to the dollar for the second time after maintaining a level of around N305 to the dollar on the spot market for two months.

The CBN has injected a total of $14.184 billion into the interbank segment of the foreign exchange (FX) market since it started its forays in the market in February this year, figures compiled by THISDAY had shown.

According to weekly FX sales by the central bank between February 21 and November 30, compiled by THISDAY, the CBN sold the greenback to authorised dealers in 60 sessions.

Dollar shortages gripped Africa's biggest economy as crude sales, Nigeria's mainstay, plunged at the start of an oil price rout in 2014. That triggered a recession last year and frustrated businesses, which had to find dollars on the black market as a result.

With Agency Report

Nigeria

Nigerians Score Buhari 52% On Governance

Nigerians have given President Muhammadu Buhari a job performance rating of 52 per cent on governance in the 2017… Read more »

Copyright © 2017 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 900 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.