The Central Bank of Nigeria, CBN, on Thursday asked commercial banks to fund their naira accounts and submit bids for dollars at N197.
The CBN had on Tuesday said it would adopt a flexible exchange rate policy, a shift from a peg for the naira seen as overvalued, which had hampered investment.
The bank has said it will introduce a flexible interbank market from a de facto peg of around N197 and retain a window for funding critical transactions, creating a dual exchange rate.
Traders said it was not clear whether the bank would settle bid at N197, adding that quantity of dollars sold has been declining. The CBN sold around $110 million last week, down from around $150 million previously.
The bank did not say how much it would sell on Thursday.
The naira traded around the pegged rate on the official interbank market on Thursday at N197.50 to the dollar but is quoted at N350 on the black market.
One-month non-deliverable forwards (NDFs) showed the naira trading at N266 naira per dollar, after hitting N276 naira per dollar on Wednesday.
But the currency parallel market reduced in value, with the naira closing at N350 on Wednesday from N346 to the dollar, as traders were confused over how the new rules would be implemented.
The Acting President of Bureau De Change Operators, Aminu Gwadabe said the CBN settled dollar bids submitted last week at its pegged rate of N197, implying that the new policy was yet to take effect.
Bond prices rose as traders bought debt to cover positions taken before the CBN’s decision as they had expected the main rate to stay at 12 per cent to tackle slowing economic growth.
Analysts have enjoined the CBN to clarify on what it describes as a special window for critical transactions for which preferential rates will apply.
The Managing Director of Financial Derivative Company, Mr. Bismarck Rewane, noted that considering the level of corruption in the country, the special window for forex will be abused.
According to him, just like the fuel subsidy was abused, the special window too will be abused as banks will disburse the forex based on their discretion.
He added that the economy desires a transparent forex market which guarantees level playing fields for all investors.