As the implementation of the floatation of the naira officially commenced today, the Nigerian currency dipped 23% in value against the US dollar.
The naira traded just twice at 255 against the dollar, over $1 million had changed hands by noon, as dealers said they were nervous about foreign exchange liquidity under the new system.
The rate was sharply weaker than the 197 peg the central bank had been maintaining for months, which it jettisoned last week in a bid to alleviate chronic forex shortages nut it was way better than 350 of the parallel market. The slump in oil revenues has greatly hammered Nigeria’s public finances and foreign currency reserves.
Naira market trading will close at 14:00 pm. Foreign investors and economists had called for months for a naira devaluation as the forex shortages choked economic growth and led to widespread capital flight.
