Monday, 20 June 2016

Naira to trade 275 to 300/$ as Market trading begins today

Naira is expected to lose around a third of its value when market trading begins on Monday, bringing to an end the central bank's much-criticised fixed exchange rate system.

The naira has been pegged at 197 to the U.S. dollar for the past 16 months but the currency trades at around 350 on the parallel market as a slump in oil revenues has hammered public finances and foreign currency reserves.

The central bank said last week it would abandon the peg in a "managed float" and the median forecast from 10 analysts surveyed by Reuters suggests it will trade on Monday in a range of 275 to 300 per dollar.

Nigeria's commercial banks will set the first exchange rate of the naira versus the dollar when the new market opens, a senior banking source said.

Banks have asked customers to submit bids in recent days, in a sign trading will be market-driven and not simply dominated by speculative interbank dealing.


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