Forex
Details of the official trading at the Wholesale Dutch Auction System (WDAS) showed the naira losing to the dollar at the first day of the bi-weekly auction yesterday.
N149.35 traded for one dollar against N149.14/$1 on the previous auction held last week Wednesday, indicating a loss of 21 kobo by the local currency. Trading at the inter-bank forex market also showed the naira depreciating to N151 compared to N150.97/$1 last weekend, while parallel market rate was also down from N152/$1 to N153/$1.
Traders attributed the drop in naira value to disparity in market demand and supply. Pressure on the local currency had subsided last week as the oil majors exchanged dollars for naira to meet October month- end purchases.
By the situation on ground, the pressure is coming back, THISDAY was told.
The dealers are expecting enhanced funding of the market by the Central Bank of Nigeria (CBN) to reduce the pressure on foreign exchange rates.
It is expected that the apex bank will continue to meet dollar demand to permit appreciation of the naira, a development analysts said is buoyed by the appreciation in the price of crude oil, which last week rose to $178 per barrel.
The CBN Governor, Lamido Sanusi had last week in Cape Town indicated resolve to stabilise exchange rate at N150/$1 and maintain a plus or minus 3 band, as it seeks to reinvigorate productive activity in the country.
Sanusi said the naira would not be allowed to either appreciate or depreciate by more than three per cent above the exchange rate of N150/$. He said the apex bank does not have a long-term fixed rate in mind, but the focus is on exchange-rate stability.
The CBN aims to auction an average of $2 billion per month to the country’s banks and foreign-currency bureaux. The money is expected to be derived mainly from oil revenue. Sanusi said the CBN sees no fundamental reason for the exchange rate to move significantly.
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