Naira quoted at 253 per US $ Dollar as interbank market opens

Naira gains 12.36 % in one week

Nigeria’s naira was quoted at 253 against the U.S. dollar as a new interbank market opened on Monday but no trades were yet to be agreed, dealers said.

Nigeria’s central bank said last week it would scrap its fixed exchange system which has seen the currency pegged at 197 to the U.S. dollar for the past 16 months.

The central bank said last week it would abandon the peg in a “managed float” in an effort to alleviate chronic forex shortages. The median forecast from 10 analysts surveyed by Reuters suggests it will trade on Monday in a range of 275 to 300 per dollar.

Monday’s 253 rate would mark a 28 percent weakening from the fixed rate.

Foreign investors and economists have called for months for a naira devaluation as foreign currency shortages choked economic growth and led to widespread capital flight.

Africa’s biggest economy, which contracted by 0.4 percent in the first quarter, faces its worst crisis in decades after the decline in oil prices since 2014 and last year’s introduction of a currency peg.

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