The Economy: CBN finally allows naira to be determined by market force

The Central Bank of Nigeria (CBN) has finally let go of pegs on the naira, allowing the market forces to determine the true value of the local currency against other currencies across the world.

This was disclosed by Godwin Emefiele, governor of the bank, who spoke at a press conference in Abuja on Wednesday.

Emefiele said the bank will operate a single trading window, which will take off on June 20, 2016, adding that the CBN will only step in from time to time regulate the market.

Emefiele said the bank will appoint less than a dozen primary dealers who would now be in charge of foreign exchange trading, driving flexibility in the system.

The governor added that the 41 banned items remain banned, and cannot access forex from the new window.

CBN had initially applied a peg on the naira keeping it at 197 to the greenback on the parallel market, while the parallel market rate spiralled gradually away from the official price to trade at 368 to the greenback on Tuesday.

The apex bank says the full guidelines would be released later in the day.