Business
Naira Weakens On High Dollar Demand
The Nigerian naira weakened against the U.S dollar at the interbank on Wednesday, after the central bank failed to meet demand for the greenback at its bi-weekly auction, dealers said.
The naira closed at 158.30 to the dollar on the interbank market, down from Friday’s close of 157.50. A separate intervention by the bank after the auction helped lift the naira up 157.51 to the greenback during trading, but was not enough to offset the supply gap, dealers said.
The bank sold an undisclosed amount of dollars to some lenders during that intervention. At the auction, the central bank sold $100 million at 152.82 naira to the dollar, short of the $417.18 million demanded.
Last Wednesday, it sold $180 million at 150.73 naira, short of $262.96 million demanded. There was no auction on Monday owing to the bank holiday which partly accounts for the elevated demand at the auction on Wednesday, dealers said, noting that a currency forward auction expected later on Wednesday afternoon could help meet demand.
“Our expectation is that the naira would continue to lose value at this level of demand, but we think that the CBN could intervene if the (dollar) rates get so high,” one currency trader said.