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Nigeria’s naira slumps against US dollar after free float

by ChemOrbis Editorial Team -
  • 20/06/2016 (14:58)
According to media reports, Nigeria’s naira weakened around 22% to 253.50 per dollar after the central bank’s decision to shift to floating exchange rates. On June 15, Nigeria’s central bank had announced that they would shift from fixed to more flexible exchange rates.

Some economists commented that the new system will take more than a week to satisfy the demand for dollars and it will take some time to see foreign investors come back to the country. According to the rating agency Moody’s, the new system will gradually eliminate any gap between unofficial exchange rates and help boost oil exporters’ income.

The Nigerian economy has been under pressure due to the plunging crude oil production, low oil prices, and foreign-exchange restrictions. Early this month, the World Bank cut its 2016 growth estimates for the Nigerian economy to 0.8% from their earlier forecasts of 4.6% in January, citing oil-output disruptions and low prices as the main reasons behind their decision.
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