Bloomberg/Tom Saater

Economy

Nigeria's central bank signals weaker official naira

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The budget sets a deficit target of 7.6 per cent of gross domestic product for 2019, something the government needs to achieve to unlock billions of dollars in international aid and revive its ailing economy.

Wednesday 12, June 2019

(Bloomberg) --The Central Bank of Nigeria (CBN) signaled it will allow the naira to weaken past its official rate as it gradually unwinds its regime of multiple exchange rates.

The central bank stopped publishing the official rate of NGN 305 per dollar on its website saying that the rate will be market-determined. That rate was used to ensure that some traders such as fuel importers, got cheap dollars.

A move toward a market-determined exchange rate will be welcomed by investors, who have long accused the government of some level of capital controls and bemoaned the system of multiple exchange rates.

Yewande Sadiku, the Head of the Nigerian Investment Promotion Commission said that the regulator is in talks with other agencies to move to a single rate for the nation’s currency.

Nigerian Customs Service told importers yesterday to pay for duties at a weaker rate of NGN 326 per dollar from NGN 306 citing a directive from the central bank, said Jonathan Nicol, President of Shippers Association of Lagos State.

TAGS : Naira, Central Bank of Nigeria

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