The local currency gained N12, rising from 367 to 355 against the United States dollar at the parallel market on Thursday, a day after the Central Bank of Nigeria released the much-awaited foreign exchange market framework.
Forex dealers and analysts said the naira-dollar exchange rate, which closed flat at 367 on Wednesday, started reacting to the new policy following a rise in the supply of the greenback at the parallel market on Thursday.
The International Monetary Fund on Thursday said it welcomed the decision by the CBN to abandon its currency peg and adopt a flexible exchange rate policy, saying this was important to reduce fiscal and external imbalances.
The CBN had said on Wednesday that a market-driven foreign exchange market would commence on Monday, in the process abandoning the peg of N197 to the dollar that it had supported for 16 months.
Experts, who spoke to our correspondent on Wednesday, lauded the CBN for its courage to implement the market-determined exchange rate policy, saying it would bring down prices and eliminate market distortions.
Source: Breaking times