The rapid depreciation of the Naira has halted since the Central of Nigeria set stringent rules in February aimed at curbing speculative trading on the currency.
According to Bloomberg the currency is now the most stable unpegged currency after Kenya’s shilling among 37 peers in Europe, the Middle East and Africa. The trading rule limited the volatility traders exploit for profit, prompting firms to call for the rules to be softened or repealed.
The trading restrictions have stopped the naira weakening amid an Islamist insurgency in the north of Nigeria and a 43 percent drop over the past year in oil, which accounts for two thirds of government revenue. “The market would love to see some restoration of foreign-exchange flexibility,” said Dapo Olagunju, Access Bank’s treasurer in Lagos.
“The question is, when will there be a meeting of minds?” Meanwhile, Sunday Telegraph learnt that the Central Bank has started talks with dealers about how to loosen the trading restrictions at the beginning of May. “There’s no change” yet to the currency regime, CBN spokesman, Ibrahim Mu’azu said by phone from on Wednesday. “We have to see the direction of the incoming government.”
The naira has closed within a range of 197 to 200.7 per dollar every day since the end of February, when the regulators first prevented traders from buying greenbacks without matching orders from customers.
It was at 199 on Thursday, after tumbling to a record-low of 206.32 on Feb. 12, the day before the new system was introduced. The trading curbs are the latest in a series of measures designed to shore up the naira, which in the first quarter was the fourth worstperformer among 24 African peers tracked by Bloomberg.
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