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Naira loses 41 kobo at WDAS

By on September 6, 2011

The naira weakened to N152.81 to the dollar on the official market (Wholesale Dutch Auction System) yesterday, down from N152.40 to the dollar at Friday’s close.

The naira, which is exchanged at N148.18 at the beginning of this year, has lost N4.63 or 3.12 per cent of its value. It has also depreciated by N7.80 or 5.05 per cent at the black market, where it trades at N162 per dollar as against N154.20 to a dollar in January. CBN has been using the foreign-currency reserves, which currently stands at $33billion to keep the naira within a 3 per cent band + or – N150 to a dollar at its WDAS.

Demand at the official window stood at $541.23 million, more than the $400 million that was sold by the CBN at the auction. The regulator sold $600 million at the only auction last week.”The market reacted to the supply shortage at the official window with some traders buying up dollars at the interbank to cover their positions,” one dealer said.

The naira eased against the United States dollar on the interbank market yesterday, as dollar supply from the Central Bank of Nigeria (CBN) bi-weekly auction fell short of demand by forex end-users, traders said. Consequently, the local currency weakened to N155.78 to the dollar on the interbank market yesterday, down from N154.77 to the dollar at Friday’s close.

Traders said Chevron sold $5 million to some lenders, but not enough to provide support for the naira. “We are expecting that Nigeria National Petroleum Corporation will sell about $500 million in the week to some lenders, which could provide some support for the naira,” another dealer said.Traders said naira should hover around the present level until additional inflows from energy majors come in, and depending on the volume of sales at the bi-weekly auction tomorrow.

Nation