CBN to meet retail traders on naira rates Tuesday

The Central Bank of Nigeria (CBN) officials will meet bureau de change operators on Tuesday to try to find ways to eliminate the gap between the official and black market dollar rates, the association president told Reuters.

According to Reuters’ report, the naira lost a third of its official value against the dollar in 2016 after the bank scrapped a peg in a bid to alleviate dollar shortages. On the black market, the naira is worth about 40 percent less than the official rate.

Finance Minister Kemi Adeosun said last month that the central bank would try to narrow the gap, which the government says is hurting an already shaky economy, but gave no details.

Aminu Gwadabe, president of the Bureau de Change association, said the body would meet central bank officials on Tuesday.

“We would like to find ways to resolve the issue of multiplicity of exchange rates and ensure stability in the market,” he said, adding that the aim was to boost liquidity and attract foreign investors.

The central bank often consults industry bodies including banking and currency associations before finalising policy.

In the past, retail operators accounted for less than 5 percent of total foreign currency trading in Nigeria. But with liquidity low on the official market, and the central bank the main supplier of dollars, the bureaux de change have done more business.

Low prices have dried up the oil income that makes up 70 percent of government revenues and pushed Africa’s largest economy into recession.

The naira has traded at around 305 to the dollar on the official interbank market since August, while it was quoted at 490 to the dollar on the black market on Monday.