Naira eases as dollar supply drops

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naira

The naira fell by 0.5 per cent after an oil company sold dollars to some lenders on the interbank market below the central bank’s clearing rate, dealers said.

The currency closed at N202.10 on the interbank market, weaker than Tuesday’s close of N201.10 to the dollar, Reuters reported.

 

The unit traded at N221 against the greenback at the parallel market. The local unit of French oil company Total asked lenders to bid for $107 million, which it auctioned within a range of N201.90 to N204 to the dollar, dealers said.
Three sales were carried out on Wednesday at N198 for a total of $23.76 million, just before the interbank market closed, Thomson Reuters data showed, with dealers attributing trades to a central bank dollar sale.

The central bank last week scrapped its bi-weekly currency auctions and a market body said it would sell dollars only at N198, a move that amounted to a de facto devaluation of the currency of Africa’s biggest economy.

Dealers said the central bank was not selling dollars to fill dollar demand it described as “ineligible orders”, including payment for credit cards, leaving lenders to source for hard currency elsewhere.
In order to curb speculation, after the forex auctions were scrapped, FMDQ, a group comprising of Nigeria’s main lenders and the central bank, said dealers will only be able to buy dollars from the central bank if they have a prior order from a corporate customer.

 

Source: VON

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