Traders says Naira still getting weaker to dollar

“The naira, which traded at 153.90 to the dollar, recorded an increase compared to 153.60 per dollar at the close of Friday’s trading.” 

Traders, on Monday, lamented that the naira has again weakened further against the dollar on the interbank market due to a high demand of the dollar at a bi-weekly foreign exchange auction.

The naira, which traded at 153.90 to the dollar, recorded an increase compared to 153.60 per dollar at the close of Friday’s trading.

The Central Bank of Nigeria (CBN) sold $400 million at 151.07 naira to the dollar at its auction on Monday, short of the $592.04 million demanded but higher than the $250 million sold at 150.75 to the dollar at the previous auction.

The naira had closed at 154.04 to the dollar last Wednesday, but strengthened to 153.60 by Friday after some oil firms sold dollars to selected lenders during the week.

According to dealers, Chevron Nigeria sold $46 million to lenders on Monday, but that was not enough to support the naira as they added that the strong demand for the dollar was due to increased activity by gasoline importers and some manufacturing firms importing raw materials for their production.

There are speculations by traders that the naira would depreciate further to around 154-154.50 to the dollar this week unless there is a major dollar inflow from oil companies.

They had said last week that the market is presently tight due to a large cash withdrawal by the NNPC, funding of foreign exchange and Treasury Bill purchases. NNPC recalled around 140 billion naira ($908.3 million) from the system last week, pushing up interbank borrowing rates.

NNPC which usually sells dollars to some lenders on a monthly basis and transfers a portion of the naira proceeds to its account with the central bank sold about $950 million in two tranches to selected banks in the last two weeks.

Source: DailyTimes