Nigeria's foreign exchange dealers said on Tuesday they are drawing up proposals to persuade the central bank to ease restrictions on forex trades to revive the secondary market. Nigeria's central bank restricted dollars sales in the interbank market in February, a move that has sharply reduced liquidity in the interbank market and put off foreign investors from buying equities and bonds in Africa's biggest economy.
The naira currency was trading at 197 on the interbank market on Tuesday. It has been stuck in the 197-199.50 range since February, after the central bank pegged the rate. Two members of Nigeria's Financial Market Dealers Association (FMDA) told Reuters that they were finalising proposals "to find a way to resolve the problem of liquidity and curb speculation."
Another source with direct knowledge of the matter said that the central bank was aware of the talks by the dealers. The central bank did not respond to requests for comment on whether it would consider a review of its measures. Its Monetary Policy Committee is due to meet on May 19. A relaxation on the interbank restrictions would likely mean a swift drop in the naira currency, analysts said. "The naira exchange rate has remained unsurprisingly stable following the introduction of the 'order-based' system in February," South Africa's NKC Independent Economists said in a note.