Nigeria to announce flexible currency regime on Wednesday – Reuters

CBN

ABUJA, June 14 (Reuters) – Nigeria’s central bank will announce a more flexible foreign currency policy on Wednesday, a bank spokesman said on Tuesday.

Last month the central bank said it would move away from a peg of the naira to the dollar but has not given any details yet. Central bank governor Godwin Emefiele will unveil the new policies at a news conference, the spokesman said.

The bank has so far kept a de facto peg of around 197 naira to the dollar but that has become unsustainable due to a shortage of hard currency stemming from a slump in oil revenues.

On the parallel market, the naira has fallen to almost 50 percent below the official rate.

Africa’s biggest economy, which contracted by 0.4 percent in the first quarter, faces its worst crisis for decades after the sharp fall in oil prices and last year’s introduction of a currency peg that put investors to flight.

Last month, the government also said it would use a lower rate of 285 naira per dollar for petrol imports rather than the pegged official rate. (Reporting by Ulf Laessing; Editing by Mark Heinrich)