Central Bank of Nigeria restarted forex trading on the official market at 381 to the dollar after no quotes for two straight sessions, as the multiple exchange rates is unified.
The Nigeria has been under pressure from both the World Bank and International Monetary Fund for currency reforms, in order to qualify for budget-support loans, and from the government perspective, to get more naira for its crude oil receipts.
The World Bank is expected to approve a $3 billion budget- support loan for Nigeria in the coming months.
Nigeria offered multiple foreign-exchange rates, which it imposed to manage dollar demand after oil prices crashed. But dollar shortages have followed, stifling growth.
No quotes were available for the naira on the official market since Monday after the central bank last week weakened the currency at an auction. It later lowered the official rate by 5.5% from 360 on Tuesday.
Traders said the central bank sold $100,000 at 380.50 naira on Wednesday on the official market.
The naira traded lower on Wednesday at 387.32 on the over-the-counter spot market, widely used by investors and importers. It weakened to 460 on the black market.
Reuters reports; “We note that all these moves are positive and will likely be enough to convince the World Bank to disburse the first tranche of the loan to Nigeria but is it enough?” Africa equity sales analysts at Stanbic IBTC Stockbrokers wrote in a note.
“The World bank also asked for a flexible exchange rate regime, how will this be achieved?”