Nigerian traders to curb naira trading
Traders will act if the currency fluctuates more than two per cent against the dollar a day.Nigerian traders agreed on
January 21st to curb dealing in the naira if the currency fluctuates more than two per cent against the dollar a day, according to Skye Bank Plc’s Babatunde Odunsi.
The policy's objective is to moderate movements in a bid to give policy makers time to identify why demand has increased before intervening with dollars, according to an anonymous source quoted by Bloomberg.
Dealers quoted by Reuters said they feared that if they did not act to curb the naira's slide, the currency could head to 200 to the dollar, creating extreme volatility and adding to deteriorating liquidity conditions. The naira has stumbled 15 per cent in the past six months.
The Financial Markets Dealers Association of Nigeria met a day after the country's central bank said it will not devalue the naira and kept its key lending rate at 13 per cent.
Central bank Governor Godwin Emefiele said on Tuesday that the naira was "appropriately priced" and the bank would "not tolerate speculative attacks".