Nigeria's naira will lose around a third of its value after the central bank floats the currency and adopts a new market-driven trading regime on Monday, a Reuters poll found. The naira has been pegged at 197 to the US dollar for the past 16 months but the currency trades at around 355 on the parallel market as a slump in oil revenues has hammered public finances and foreign currency reserves.
"The rate has been kept artificially high for a long time and so we think that in a market driven system, the official rate would converge towards where the black market has been," said John Ashbourne at Capital Economics. "But it should not go quite as low as the black market rate is currently because there will be more liquidity and dollar supply, which should prevent it from falling where the parallel rate is." A Reuters poll in May predicted Nigeria's central bank would devalue the naira in the coming months. That survey also said the Bank would hike interest rates last month and in November to control inflation. However, the central bank kept its benchmark interest rate on hold at 12 percent and maintained its existing cash reserve ratios for commercial banks.