The Central Bank of Nigeria (CBN) on Wednesday allowed the naira to depreciate by about 2 percent on the official market to a record, but the currency’s rate remained above where it trades at central bank auctions and on the black market.
Nigeria is trying to find a way to unify its multiple exchange rate system, used to keep the naira artificially strong.
President Bola Tinubu told members of his governing party last week that the country would not have multiple exchange rates anymore.
The naira fell as low as N475 against the U.S. dollar from Tuesday’s trade of around N465a before recovering to N466.
Traders said the central bank had allowed them to trade the currency as weak as N475 to the dollar on the official market, outside a previous band of N460 to N467 to the dollar.
In the past, the bank has allowed the naira to weaken within the 5-naira band at the official window.
The central bank has been adjusting the naira gradually on the official market to avoid a large-scale devaluation.
The bank sold the dollar at N645 at its Friday auction, fueling speculation that a devaluation that could weaken the official exchange rate closer to the auction level was imminent.
Last Thursday, the central bank denied devaluing the naira following media reports of a big fall in the currency after Tinubu met the governor. ~Reuters