Nigeria has abandoned its years-long currency peg and allowed the naira to trade freely, traders and local bankers said, prompting the biggest single-day fall in its history.
The about-turn, which has not been confirmed by the central bank, would mark the latest in a series of eye-catching moves since new president Bola Tinubu took office last month. Markets anticipated a possible end to Nigeria’s complex exchange rate system when Tinubu on Friday removed central bank chief Godwin Emefiele, whose signature policy was to prop up the naira.
The country’s official exchange rate dropped to N600 against the dollar on Wednesday according to data from Refinitiv, a fall of 23 per cent from a day earlier and the biggest single-session drop since 2016.
But traders said the real fall was even more marked, with the naira actually changing hands at local banks at about N750 to the dollar, a 40 per cent fall, the biggest drop in its history and roughly in line with the parallel rate used by ordinary Nigerians. Local media reported that traders were told by the central bank to trade the currency freely.
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