The naira is currently trading at N750-N755 per dollar at the investors and exporters (I&E) window.
According to sources the Central Bank of Nigeria (CBN) on Wednesday has directed commercial banks to sell forex freely at market-determined rates.
The market rate is said to be a "willing buyer, willing seller" arrangement.
This implies that Nigeria has eased its control of the naira, allowing the local currency to freely float.
A free-floating exchange rate occurs when a government allows the exchange rate to be determined purely by market forces and there is no attempt to ask the central bank to influence the external value of the exchange rate.
The development comes days after the suspension of Godwin Emefiele as CBN governor by President Bola Tinubu.
Folashodun Adebisi Shonubi, deputy governor, operations directorate, is expected to act as the CBN governor pending the conclusion of an investigation ordered by the president into Emefiele's activities.
The Department of State Services (DSS) later announced that Emefiele is currently in its custody for "some investigative reasons".
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