The Nigerian Naira is set to experience its biggest drop in eight months as the Central Bank of Nigeria accepts flexibility in the foreign exchange market.
On Friday, 11:48 am in Lagos state, Naira traded at 418.55. In the past seven days, Naira has depreciated by 0.8%, which is its lowest figure since February 2021. The Central Bank of Nigeria closely manages the spot exchange rate of the Naira keeping it within a desired rate.
Professor Osinbanjo, The Vice President of Nigeria, has urged the CBN to allow Naira to trade with more liberty in the market. He further explained that the central bank’s proposition favors those able to obtain dollars at the official rate, because they can then sell the foreign currency in the more expensive parallel market, where it is being traded around 575 Naira.
Samir Gadio, Head of Africa strategy at Standard Chartered Bank said “The depreciation seems to reflect a CBN bias for relatively more foreign exchange flexibility, The market is still trying to ascertain the scope and end-goal of this FX adjustment.”
The Nigerian economy now hopes that the Dangote refinery, which will produce an average of 650,000 per day will save Nigeria 30% in foreign exchange which is being used for the importation of petroleum commodities.