Forex: The ‘Floating Naira’ Explained In Simple Terms

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The Floating Naira Exchange Rate Explained In Lay Terms

The Central Bank governor announced, Wednesday, following months of pressure to put in check the out-of-control economic crisis in Nigeria, that it will float the naira.

The naira rate will be “market-driven” from June 20, says Gov. Godwin Emefiele.

President Muhammadu Buhari was pressured after months of resistance by critical foreign currency shortages caused by slumping oil prices. The central bank had done all it could to defend the naira at a rate of 197 to the dollar as the currency traded up to 370 on the parallel market.

Now, for many of us, all of this sounds like Chinese. Questions have been thrown, especially bordering on the ‘floating naira’. What does it all mean?

Well, Adeyinka Ogunnubi, author of Honey, Is it in the Budget?, a book on personal finance, broke down what the floating Naira exchange rate means with a series of tweets.

 

 

Sally

Sally

Sally is the author of the Fish Brain series and Boys With Toys. She has written other online series like The Immortals’ Code, No heart Feelings, Novocaine Knights, To Tame a Virgin and In Pursuit of Kyenpia. She lives in Lagos with her husband and kids and loves the occasional bar lounging with friends. She blogs on www.moskedapages.com or you can follow her on Twitter @NovocainKnights

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