Naira defies analysts’ expectation, CBN’s $235m forex auction

The naira on Monday defied analysts’ expectation and the Central Bank of Nigeria’s (CBN) intervention as it lost N1.12k against the dollar at the inter-bank market. Analysts had expected naira pressure to moderate this week following up- ward review of the weekly forex cash sales to bureau de change (BDCs) by 100 percent.

The CBN on Monday offered a total of $300 million, about 50 percent increase compared to $200 million offered last week. But it sold a total of $235 million to some deposit money banks at RDAS at the rate of N168/$. Consequently, after trad- ing on Monday the local currency closed at N191.30/$ as against N191.18k/$ on Friday last week at the in- ter-bank market foreign exchange, according to the data obtained from Finan- cial Markets Dealers Quota- tions (FMDQ).

Read also: Naira slides N1.39 against dollar at inter-bank market

At the parallel market, naira weakened by N1.00k/$ or 0.5 percent to close at N208 compared to N207 traded last week Friday. Currency dealers at the parallel market told Busi- nessDay that there is scar- city of dollar in the market. “It is difficult to see someone who has dollar for sale”, the dealer said. Meanwhile, dealers told Reuters that Total offered to sell $80 million to some lenders on Monday while Shell sold an undisclosed amount of dollars to buy naira for their local operations.

The currency had initially gained 1.66 percent to N186.80 after the central bank and two oil companies sold dollars to lift the naira, before it then slipped into negative territory. The naira has hit a string of record lows as dollar liquidity on the interbank forex market thins out amidst a collapse in the price of oil, Nigeria’s main export.

Last week, the USD/naira exchange rate held steady at N168.00/USD at the official market. At the interbank market, the naira lost 2.19% to close at N190.18/USD by Friday. Similarly, the naira weakened by 6.81% at the bureau de change segment to N204.00/USD while it depreciated by 7.53% to N207.00/USD at the parallel market segment.