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UPDATE 1-Nigerian banks submit dollar bids at 197, eyes FX shift
May 26, 2016 / 10:47 AM / a year ago

UPDATE 1-Nigerian banks submit dollar bids at 197, eyes FX shift

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LAGOS, May 26 (Reuters) - Nigeria's central bank told commercial lenders to fund their naira accounts and submit bids for dollars on Thursday at 197, traders said, citing a message from the regulator.

On Tuesday, the central bank said it would adopt a flexible exchange rate policy, a shift from a peg for the naira seen as overvalued, which had hampered investment. It will give guidance on the policy within days, creating uncertainty, traders say.

The bank has said it will introduce a flexible interbank market from a de facto peg of around 197 and retain a window for funding critical transactions, creating a dual exchange rate.

Traders said it was not clear whether the bank will settle Thursday's bid at 197, adding that quantity of dollars sold has been declining. The central bank sold around $110 million last week, down from around $150 million previously, traders say.

The bank did not say how much it would sell on Thursday.

The naira is trading around the pegged rate on the official interbank market on Thursday at 197.50 to the dollar but is quoted at 350 on the black market.

One-month non-deliverable forwards (NDFs) showed the naira trading at 266 naira per dollar, after hitting 276 naira per dollar on Wednesday. (Reporting by Oludare Mayowa and Chijioke Ohuocha; Editing by Toby Chopra)

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