The optimism that greeted Nigeria’s decision to float its currency in June has given way to frustration, as the naira is yet to settle at a fair value almost six months since the policy shift from a fixed to floating exchange-rate system. The currency has been trading at a rate of N315/ US$ in the interbank market, but the rate in the parallel market, where most Nigerians buy and sell foreign exchange, has been much lower, at about N460/$ . Experts believe the official rate does not reflect the true value of the currency, as the Central Bank of Nigeria is reportedly interfering with market operations by advising operators on how much to bid. Meanwhile Nigeria’s domestic intelligence agency, the department for state services (DSS), arrested some parallel market operators this month and reportedly instructed them at what rates to trade. A spokesman for the Bank welcomed the action, and claimed that those arrested were unlicensed operators involved in speculation. With the arrests unle...
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