Nigeria Removes Foreign Exchange Restrictions, Naira Rate To Be Market-Driven

Governor of Nigeria’s Central Bank, Godwin Emefiele, this afternoon announced that the naira’s rate will now be market-driven. This is coming after months of pressure from economists and finance analysts on government to devalue the Naira. Prior to this announcement, the official exchange rate for the Naira was N199 to $1, but as high as N350 to $1 at the parallel market.

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.