Demand for the dollar spurred yesterday, making the naira to depreciate by N1.00 to close at N156.21 to the dollar at the official bi-weekly auction. At the interbank, the naira also shed weight, losing 85 kobo to close at N159.75.
The Central Bank of Nigeria (CBN) only sold $250 million out of $411.62 million demanded, the same amount it sold at the opening market on Monday. The naira however remained stable at the parallel market, remaining unchanged at N160.80.
“The days ahead will tell the direction but the naira depreciation is saying a lot about the state of our economy,” said Suleiman Ghali, a dealer in Lagos. He said the failure to meet demand may give rise to further speculation in the days ahead.
The naira is coming under intense pressure just two days after the CBN eased the foreign exchange band for the naira to between N150 to N160, from N145 to N155, technically devaluing the currency in the process. The move, expected to relax pressure on the naira appears not to have achieved much as demand continued and the regulator could only meet 61 per cent of demand.
The intervention of $120 million at the interbank by some oil firms did little to dampen demand for the dollar.