Naira tumbles against dollar

Naira slumped 23 percent against the dollar on Monday after the central bank removed its currency peg to alleviate chronic foreign currency shortages choking growth in Africa’s biggest economy.
The naira traded just twice at 255 against the dollar, and less than $1 million had changed hands around midday, Thomson Reuters data showed, as dealers said they were nervous about foreign exchange liquidity under the new system.

The central bank plans to hold a special auction to help reduce a mounting foreign exchange order backlogs and increase liquidity. Interbank trading will be extended by two hours until 4 p.m local (1500 GMT).

Bids submitted by banks prior to the auction ranged between 210-290 naira to the dollar, dealers said.