October 24, 2018

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Currency traders eager for Buhari’s inauguration

Currency traders eager for Buhari’s inauguration

As currency traders await the inauguration of Nigerian President-elect Muhammadu Buhari on Friday, top of their wish list for the new administration is an overhaul of the nation’s foreign-exchange rules.

Price swings in the naira have plunged since curbs on speculation were introduced in February and it’s now the most stable unpegged currency after Kenya’s shilling among 37 peers in Europe, the Middle East and Africa. That limits the volatility traders exploit for profit, prompting firms from Lagos-based Access Bank Plc to Bank of America Corp. to call for the rules to be softened or repealed.

Talks are already underway with central-bank officials and a new regime may be unveiled once Buhari is in place, people with knowledge of the discussions said. The trading curbs have stopped the naira weakening amid an Islamist insurgency in the north of Nigeria and a 43 percent drop over the past year in oil, which accounts for two thirds of government revenue.

“The market would love to see some restoration of foreign-exchange flexibility,” said Dapo Olagunju, Access Bank’s treasurer in Lagos. “The question is, when will there be a meeting of minds?” Read more

 

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