The value of the naira to the United States dollar declined to its lowest this week on the interbank market yesterday following renewed demand for the greenback.
However, it remained flat at the Central Bank of Nigeria (CBN) conducted bi-weekly auction, exchanging at N155.87/$1 at yesterday’s auction.
The local currency fell to 161.30 to the dollar on the interbank, erasing recent gains and compared with its 161.05 the previous day.
The CBN however sold less than the $200 million offered at the bi-weekly foreign exchange auction, as total sales stood at $180 million at 155.87 naira to the dollar, compared with the $163 million sold at the same rate on Monday.
“There are speculations that the NNPC plans to sell dollars in the market this week and this could support naira recovery, otherwise it will be another round of depreciation,” another dealer said.
The naira firmed 1.2 per cent last week, after a surge of inflows from foreign investors positioning to buy treasury bills and the central bank’s dollar sales to banks.
“Demand from some banks buying dollars for their customers was quiet large today, sucking the bulk of dollar liquidity in the market and pushing the naira value down,” one currency dealer said.