Naira weakens on strong dollar demand

Posted by admin Headlines Tuesday, March 8th, 2011

THE naira weakened slightly against the United States dollar on the interbank market, on Monday, as demand for the greenback remained strong and inflows from energy companies decreased

The currency closed at N154.30 to the dollar, compared to N154.25 on Friday

The Central Bank of Nigeria (CBN) sold $350 million at N150.68 to the dollar at its bi-weekly auction on Monday, marginally lower than the 152 million demanded, but an increase compared to the $250 million sold at N150.71 a dollar at last Wednesday’s auction.

Traders said demand remained strong from some lenders, who were covering their position and supplying bureaux de change outlets.

An oil firm, Exxon Mobil, sold about $49 million to some lenders on Monday, but traders said dollar liquidity remained tight, as most of oil multinationals has concluded their month-end dollar sales.

“We are hopeful that there could still be some inflow from some energy firms to help provide the needed dollar liquidity in the market, otherwise, the naira will continue to depreciate,” one dealer said.

The bulk of dollars traded on the interbank market came from energy companies, as banks were not allowed to trade dollars purchased at the official window among themselves.

-Tribunewp_posts