ABUJA, Nigeria (AP) – Nigeria will float its embattled naira currency, the Central Bank governor announced Wednesday after months of pressure to control a spiraling crisis in Africa’s biggest economy.
Gov. Godwin Emefiele told reporters the naira rate will be “market-driven” from June 20.
Critical foreign currency shortages caused by slumping oil prices forced a policy change that President Muhammadu Buhari for months had resisted. The bank had defended the naira at a rate of 197 to the dollar while the currency was trading at up to 370 on the parallel market .
“They have to accept reality at some point after a period of denial,” said Ayo Teriba, CEO of Economic Associates consultancy. Companies were unhappy with the government forcing them to exchange their imported foreign exchange at the low fixed rate and, when they needed to buy some, use the parallel market at the much higher rate, he told The Associated Press.
Emefiele indicated a floating naira should get rid of speculators.