The Governor of the Central Bank of Nigeria Godwin Emefiele has written a letter to President Muhammadu Buhari that was leaked to the Reuters news agency.
Emefiele in a letter explains the president the foreign exchange plan announced on June 15.
President Muhammadu Buhari
He said it could take three to four weeks to clear a $4 billion backlog of foreign exchange demand.
In the letter, the CBN governor noted that the bank hopes the local currency will finally trade at around 250 per dollar, a level the president has “approved”.
“I must assure Your Excellency that we are indeed reasonably optimistic that at some point the rate will settle around 250 naira,” he says in the letter.
The CBN on June 15 said it would begin market-driven foreign currency trading on Monday, leaving the peg of 197 naira per dollar that it has been supported for 16 months.
The Nigerian president has for many months insisted that he does not want the devaluation of naira, but supported a more flexible exchange rate policy when the central bank outlined its plans in May, without explaining.
Nigeria is currently facing its worst crisis in decades after the weakening in oil prices since 2014 and last year’s overview of a currency peg, which forced a large-scale capital flight.
The federal government has battled devaluing naira for more than a year despite other key oil producers, including Russia, Kazakhstan and Angola, allowing currencies to fall after crude prices crashed.