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The naira weakened against the U.S dollar at all segments of the market yesterday, depreciating by 20 kobo and 25 kobo, while shedding nearly N1.00 at the parallel market to close at N156.70, N161.80 and N163 at the official, interbank and parallel markets respectively.
The Central Bank of Nigeria (CBN) could only supply $200 million at the official bi-weekly auction out of $245 million demanded as supply shortfall at interbank market also put pressure on the naira.
“We are getting to the end of the year so demand will surge, but a lot will depend on how the CBN is able to mitigate the market,” said Suleiman Ghali, a trader.
According to Reuters, central bank was continuing its effort to regulate demand by advising banks on the amount of dollars to be demanded and rate quote to reduce pressure on the bi-weekly auction. It reported that the Nigerian Liquefied Natural Gas (NLNG) company sold unspecified amount of dollars to some lenders, while the central bank also intervened at the interbank market toward the end of business, but this was not enough to calm the market.
Meanwhile, the Debt Management Office (DMO) plans to auction N64.10 billion in 10-year sovereign bonds with different maturity dates on December 14, at its last monthly debt auction this year. The debt office said it would sell N34.10 billion of 10-year paper due to mature in 2018 and N30 billion in the 10-year paper maturing in 2019. All are re-openings of previous issues.
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