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Nigeria’s Central Bank Finally Throws in Towel on Naira Peg

  • Exchange rate will be ‘purely market-driven,’ Emefiele says
  • Forward contracts rise to record as traders see devaluation
Updated on

Nigeria’s central bank said it will allow the naira exchange rate to be market-driven, setting the stage for a devaluation of as much as 36 percent when a new trading system comes into effect June 20.

The Central Bank of Nigeria will select a group of around 10 primary dealers through which the naira will be traded. There will only be one exchange rate and the bank will intervene in the market to buy or sell foreign exchange “as the need arises,” Governor Godwin Emefiele told reporters in Abuja, the capital, Wednesday.