In
spite of the Central Bank of Nigeria (CBN)’s intervention through foreign
exchange auction, the nation’s currency naira on Monday weakened by N0.55k
against the US dollar at the inter-bank market.
The
CBN on Monday offered a total of $350 million but sold a total of $349.9 to 22
deposit money banks at rate of N155.75/$ at its twice weekly Dutch Auction
System (RDAS).
Consequently,
the local currency on Monday closed at N163.85/$ as against N163.30 on Friday
last week, according data obtained from Financial Markets Dealers Quotation
(FMDQ).
Analysts
had anticipated sustained pressure on the local currency this week in spite of
expected dollar sales from oil companies.
“Dollar
demand from politicians holding their assets in hard currency ahead of elections
next year has increased pressure on the local currency,” one dealer told
Reuters.
The
central bank was selling dollars directly on the interbank market to try to
prop up the currency, which has shed almost 3.5 percent this year, for most of
last week.
On
Monday, the local unit of Royal Dutch Shell sold an undisclosed amount of
dollars to some lenders, which was not enough to support the naira.
The
naira has “depreciated substantially” on the interbank market in the past two
months, Central Bank Governor Godwin Emefiele noted during last Friday’s
interest-rate-setting meeting, citing risks from declines in global oil prices
and domestic production.
Brent
crude oil fell below $98 a barrel on Monday, dropping for the third session in
four, as sluggish demand and ample supplies outweighed expectations of a cut in
oil output from the Organization of the Petroleum Exporting Countries.
Businessday
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