Governor Godwin Emefiele will announce the new policy on Wednesday afternoon in Abuja, the capital, according to Isaac Okorafor, a central bank spokesman. The governor will make the announcement at a press conference starting at 1:30 p.m., according to an invitation from the Central Bank of Nigeria. The event will be televised, Okorafor said.
Twelve-month non-deliverable naira forward contracts surged 5.7 percent to a record 360 per dollar as of 8:04 a.m. in Lagos, suggesting traders see the currency weakening to near that level. Three-month forward contracts climbed 3.6 percent to 315 per dollar, also a record.
Emefiele has faced calls for more than a year to devalue the currency, as other oil exporters from Russia to Kazakhstan and Angola have done, amid a rout in crude prices since mid-2014 to around $50 a barrel. Investment into Nigeria has shrivelled as foreigners are put off by capital controls needed to defend the currency’s peg of 197-199 per dollar, while local businesses have struggled to import raw materials and equipment.
Analysts including those at Renaissance Capital Ltd. have said they expect the central bank to allow the naira to weaken in the interbank market, while allocating dollars at a fixed, subsidised rate to industries the government deems strategic. The central bank may also reinstate a minimum holding period for foreign investors buying naira bonds, according to a person who attended a meeting between Emefiele and bankers on June 9.
Emefiele said last month the central bank would implement a “flexible” exchange-rate policy to help alleviate a dollar shortage that has strangled the economy.