Naira depreciates in free float

The naira plunges against the US dollar after Nigeria's government scraps its fixed exchange rate. PHOTO: AFP/PIUS UTOMI EKPEI

The naira plunges against the US dollar after Nigeria’s government scraps its fixed exchange rate. PHOTO: AFP/PIUS UTOMI EKPEI

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 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 11:00 am, 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.

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9 Comments
  • duwdu

    “The offer is 249 to 265 Naira to the Dollar,” is not too bad – at least for now, provided the band is true and holds.

    This is a big improvement, actually, compared to the immediate past rates obtainable intra-bank – or, worse, in the black market. Added to this new scenario is that ordinary folks such as yours truly, will not even have to consider patronizing the black market with our meager requirements of FOREX any more.

    And, with some deft management of/intervention in the new FOREX process by the CBN, the rates may even appreciate in favour of the Naira going forward.

    Good luck, my dear countrymen and women.

    P34c3
    …..

  • Basil Ogbanufe

    The objective of allowing the Naira to float freely is to determine its true value. The Naira’s true value is its exchange rate that encourages local production towards self sufficiency. We must not forget that it’s the fiscal policy that drives the economy not monetary policy.

    • ewucanbeer

      tell us what we do NOT know smartass! ITK!

  • Basil Ogbanufe

    I foresee the Naira losing value further.

    • ewucanbeer

      Why? Ifa tell you?

  • Omooba

    But GTB still debits its customers through the ATM at N340 to a USD abroad.

  • yannis

    Artificial falling just watch and see how dollar will rise soonest

    • ewucanbeer

      Very pessimistic are you?

  • Bongos

    BY DECEMBER 2016, THE DOLLAR RATE WILL BE $1==500 naira. THE FEDERAL RESERVE IN AMERICA WILL INCREASE THEIR RATE MAKING THE DOLLAR TOO STRONG FOR THE DEVELOPING ECONOMIES eg, venezuela,brazil,argentina etc

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