LAGOS (Reuters) - Nigeria's commercial banks will set the first exchange rate of the naira versus the dollar when the currency is allowed to float freely on Monday after the central bank abandoned its dollar peg, a senior banking source said on Friday.

On Wednesday, the central bank said it would float the national currency on Monday, but it has given few details on how the new rules will be implemented.

In their first detailed guidance, central bank officials told bank chief executives at a meeting on Friday that lenders would set the first naira rate to the dollar based on demand without intervention from the central bank, one senior banking official told Reuters.

A central bank source said that Governor Godwin Emefiele was at the meeting and confirmed that commercial banks will determine the market rate on Monday.

The central bank officials also told the bankers it did not commit itself to clearing up a backlog of hard currency estimated at around $4 billion but will intervene if needed, the banking official said.

He also said the central bank would open up licenses for primary market dealers beyond the initial target of eight to 10 participants that it had announced on Wednesday.

Bid-offer spreads for trading would be set at one naira, and banks are required to publish their buy and sell rates on a daily basis, the banking source said. The central bank will the evaluate performance of the new regime by December, he added.

Primary dealers can handle volumes of $5 million between themselves as the standard order size and can trade up to $1 million with any other dealer, the source said.

The central bank could not be immediately reached for comment.

Osgilliat:
This is cool.. You will have to be go from banks to banks to determine the one that will favors you. Thanks to God I'm not having account with only one bank. Let the negotiation begins.

jublazer:
o.k by tomorrow we hope there will be no denying .......

Adesiji77:

http://in.mobile.reuters.com/article/idINKCN0Z324X?irpc=932

dennisworld1:
nor understand. Went to UBA yersteday saw buying rate 196 and selling rate 199. At their board. Someone should make me understand

abhosts:
The Banks have been setting their own rates since. the Naira Decline Started.

All this Grammar just to tell us things would remain the same.

goodlifehyd:
I think this is a nice idea thou, could remember when you have to cough out thousands to open an account but now that there are alot of competitions in the market some are even begging to give you an account for free, similarly when you peg your dollar at 360 and Bank B is selling for 300 nobody go tell you to drop ur price or else your customers go just vanish like wind

Well me just dey pass-by

abhosts:
The Banks have been setting their own rates since the Naira Decline Started.

All this Grammar just to tell us things would remain the same.

Osgilliat:
This is cool.. You will have to be go from banks to banks to determine the one that will favors you. Thanks to God I'm not having account with only one bank. Let the negotiation begins.