CBN Suspends Dollar To Naira Trades Till Monday

Nigeria’s central bank made no dollar to naira trades on
the interbank market on Thursday but settled $13.6
million of trades made on previous days at about the
naira’s pegged rate of 197.5 per dollar, an official said.

The central bank said on Wednesday it would begin
open-market foreign currency trading next week,
abandoning its 16-month-old peg against the dollar and
setting the stage for the Nigerian currency to fall sharply.

Dealers said they expected no interbank currency market
activity until the new trading regime starts on Monday.
“Central bank is not selling any money. Those who want
to trade can do that among themselves,” the official said,
referring to the volumes as “carryover trades” agreed
but not settled before Wednesday’s announcement.

Nigeria, Africa’s largest crude exporter, has resisted
devaluing its currency for more than a year even though
other major oil producers, including Russia, Kazakhstan
and Angola, have allowed their currencies to fall as crude
prices plunged.

Currency traders were meeting on Thursday to discuss
the new rules and will seek to determine trading spreads
including circuit breakers, if any, they say.
“The rules are just a guideline. The practicality is totally
different so people are holding on until Monday,” one
trader said.

Three economists estimated the fair value of the naira at
between 280 and 300 against the dollar, although the
black market rate is around 370.