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Nigeria: Policymakers playing catch-up after de facto devaluation

Recent reforms to Nigeria’s FX regime have further complicated an already convoluted system, which includes a variety of exchange rates. In this Watch, we provide an overview of the state of the FX system and an estimate of the effective exchange rate that is prevailing in the market. While many Nigerian commentators still fear a devaluation of the official exchange rate, we argue that the effect of such move would be limited to a few sectors.

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