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The Naira lost value against the dollar on Wednesday at the Investors and Exporters window, where N664.04 was exchanged for 1 USD.
NAN reported that as compared to the N471.67 it traded for the dollar on Tuesday, the local currency fell by 40.78%.
The Central Bank of Nigeria (CBN) ordered banks to lift the rate cap on the naira at the Investors' and Exporters' Window, which was followed by the devaluation.
The instruction would permit the unrestricted exchange of the national currency for dollars and other world currencies.On Wednesday, the open indicative rate was N473.83 to the dollar.
Before it closed at N664.04, the exchange rate for the day's trade reached a high of N791 to the dollar.
In the course of the day's trade, the Naira fell as low as 461 to the dollar.
On Wednesday, transactions in the official Investors and Exporters window totaled 193.33 million dollars.
The CBN's mandate for a free flow of the naira, however, was hailed as a positive step by Prof. Ndubisi Nwokoma, Director of the Centre for Economic Policy Analysis and Research at the University of Lagos.
"The CBN judgment is a positive step in the hope that needless arbitrage (round-tripping) would be stopped in the market.
"As a result of this, we anticipate that the foreign exchange rate will trend down as foreign capital influx rises.
"The downside is that a lot of assets or foreign industries connected to the Naira's value, including external debt and others, will be adjusted upward with just a slight impact on inflation.
"Inflationary effects may not be much, given that many economic agents had been sourcing their foreign exchange at the parallel market before now," he added.
