Nigeria Central Bank Won’t Devalue Naira, Traders’ Union Says

LAGOS (Capital Markets in Africa) – The Central Bank of Nigeria has no plans to devalue the naira, the head of a money changers’ body said after meeting policy makers.

Officials are “not looking at devaluation” as rising oil prices boost reserves, according to the Association of Bureaux De Change Operators of Nigeria. The naira was little changed at 315.34 per dollar on Thursday, while Brent crude traded above $56 per barrel.

“They assure us that people have no reason to think the central bank will devalue the naira because they have more buffers,’’ Aminu Gwadabe, head of the BDC union, said by phone from Lagos. “They are looking at how they can increase liquidity and close the gap between the official and parallel market.’’

Declines in oil since mid-2014 cut government revenue and triggered currency controls that crippled industries and contributed to contraction of the nation’s economy. Authorities removed a 15-month currency peg in June in a bid to attract inflows. Although the naira has plummeted almost 40 percent since the unit was floated, traders said it is still being managed by the government.

The rebound in oil prices has helped Nigeria boost its foreign-exchange reserves to $26.7 billion as of Jan. 10.

The central bank agreed to give currency bureaus greater access to autonomous foreign-exchange sources including export proceeds in a bid to increase dollar supply, Gwadabe said. Money changers said Wednesday they will introduce an exchange rate for the naira to help the central bank combat unregulated black market rate of about 495 naira to a dollar, compared with a rate of 399 offered by the bureaus.