Nigerian naira weakens, dollar demand rises
Nigeria’s naira
currency weakened at both the interbank market and official window on
Wednesday after demand for the U.S. dollar unexpectedly hit a
five-month high, traders said.
The central bank
sold $250 million at its bi-weekly foreign exchange auction on
Wednesday against the $517 million demanded, prompting the naira to
fall, traders said.
The local currency
eased to 151.05 to the dollar on the interbank market from 150.95 at
Tuesday’s close. The central bank sold at 149.06 to the dollar at
Wednesday’s auction, compared to 148.88 on Monday.
“The sudden
increase in demand for the greenback at the bi-weekly auction forced
many forex users to seek alternative sources … This created frenzy in
the interbank market, forcing down the naira,” one dealer said.
But traders said the central bank was quick to respond with an
additional offer to sell dollars to lenders to cover the shortfall in
supply.
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