Naira falls on reduced dollar inflow

The naira slipped slightly against the dollar on the interbank market yesterday driven by tight supplies of the US dollar and sustained strong demand from offshore investors selling their equity holdings.

The local currency closed at N165.75 to the dollar, compared with N165.65 on Friday.A unit of Addax Petroleum sold $10 million to some lenders, Eni sold $2 million while Royal Dutch Shell sold an undisclosed amount of dollars. But aggregate dollar flows were seen as insufficient to support the local currency.

“Many offshore investors in fixed income assets and equity considered the naira at this level a trigger for their exit from the local market,” one dealer said, noting that this had fed the pressure on the local currency.The naira has been under pressure over the past six weeks from falling global oil prices and a drop in Nigeria’s forex reserves, which has led offshore investors to cut back their positions in the debt and stock markets, Reuters noted.

[This Day]

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