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Naira falls to 189 at interbank market

By on January 22, 2015

The naira fell against the dollar to 189 at the interbank segment of the foreign exchange market on Tuesday, up from 186.90 recorded on Monday.

Dealers said the national currency tumbled against the greenback despite the Central Bank of Nigeria’s intervention to prop it up.

They linked the development to a lack of dollar liquidity and apprehension over the possible outcome of the two-day Monetary Policy Committee meeting which ended in Abuja on Tuesday.

The dealers said the naira, which was trading near record intraday lows of 191.85 to the dollar, had firmed in volatile trades to 188.77 after the intervention before closing at 189.

Analysts have, however, reacted to the development.

The Head, Research and Investment, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, said, “We see the Central Bank of Nigeria continuing its intervention in the market to be able to stabilise the naira. If oil price averages $40 per barrel after the elections, the central bank may have to devalue the naira.”

Currency strategist at Ecobank, Mr. Kunle Ezun, said, “There was no need for a change (at the MPC meeting) because the policy measures announced in November need to take effect. We project the naira to hover between 185 to 190 naira per dollar before the next MPC meeting. That of course will be sustained by central bank interventions and administrative measures.”

 

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