Naira Weakens on Strong Greenback Demand

The naira eased against the U.S. dollar on the interbank market on Monday after a surge in demand by one lender buying the greenback for its customers, dealers said.

The local currency closed at 157.80 naira to the dollar, weaker than Friday’s close of 157.55 naira.

The naira had firmed to 157 naira level last week from 158 to the dollar after the state-owned energy company NNPC sold around $480 million to some banks.

“The dollar inflow from the NNPC is gradually thinning out because of a surge in demand, driven by importers who were taking advantage of cheaper dollars to bring forward their obligations,” one dealer said.

Dealers said the naira should be back at 158 naira level this week as dollar demand continues to reduce market liquidity, unless a major inflow from oil companies come in.

At the bi-weekly auction, the central bank sold $180 million at 155.78 naira to the dollar, compared with the $200 million it sold at 155.80 naira at last Wednesday’s auction.

Source: Reuters

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