Senate considers bill to reverse naira free float

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Senate President Bukola Saraki

The Senate is proposing a new currency law that will give the Central Bank of Nigeria legal powers to set exchange rates, effectively rolling back the nation’s six-month-old free float.

The bill, sponsored by Senator John Enoh, is meant to repeal the existing foreign-exchange legislation, under which market rates are “mutually agreed” between counterparties, and allow the CBN to decide those rates.

The draft has been through two readings in the Senate and will be put to a public hearing next year, according to Enoh, who is representing Cross River Central Senatorial District. “The [central] bank may determine the basic exchange rate, rate of purchase and sale of foreign exchange and arbitrated exchange rate in foreign exchange transactions, if it is necessary to do so for harmonious and orderly foreign exchange transactions in Nigeria.

According to a copy of the proposed law seen by Bloomberg. Residents and non-residents shall perform transactions in conformity with such basic exchange rate,” it added.

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