Naira falls to N286/ per dollar in interbank market

For the second day, the naira has depreciated to N286 per dollar as the Central Bank of Nigeria (CBN) sold $2 million dollars in interbank market on Tuesday.

This is coming after the CBN removed its currency peg in an effort to alleviate chronic foreign currency shortages choking the economic growth.

The naira, which opened at 286 per dollar, representing 1.4 percent decline closed lower at 282 naira on Monday.

Ripples Nigeria had earlier reported that the CBN commenced new flexible foreign exchange trading yesterday with expectation to impact the market positively.

Read also: CBN auctions $615m as flexible FX policy commences

Although, the impact is not felt yet, but the CBN is optimistic that the initiative will boost liquidity in the market.

Recall that the inter-bank exchange rate was fixed at N197 per dollar via controls and administrative measures.

But last week, the CBN introduced a flexible exchange rate regime which allows for the determination of the exchange rate by market forces of demand and supply.

Under the new regime, the CBN can intervene in the market by conducting a Secondary Market Intervention Sales, SMIS, through the sale of foreign exchange to Authorised Dealers (wholesale) or to end-users through Authorised Dealers (retail).

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