The value of the naira continued to run southward as it fell against the United States dollar at the interbank market yesterday, on strong dollar demand.
Demand had outpaced thin supply from an oil company and some offshore investors in local debt, with the naira closing at N157.75 to the dollar, weaker than the N157.55 rate as at? Friday, but back at the level it was last Monday.
Dealers said unit of Addax petroleum sold about $10 million to some lenders yesterday, while dollar flow from offshore investors trickled into the market, but not enough to stem the depreciation.
The naira has been hovering at around N157-158 level for three weeks, owing to dollar sales by the state oil company, multinational oil firms and inflows from offshore investors buying local debt.
Dealers said the naira weakened to as low of N157.90 intraday because of buying by some importers, but closed at N157.75 after Addax released its bid result.
“We see the naira trending around the present level for the rest of the week because of anticipated dollar inflows from offshore investors in a bond auction later in the week,” one dealer said.
Nigeria plans to issue N60 billion in local bonds, with maturities of between five and seven years at its regular auction on Thursday this week.
At its bi-weekly foreign exchange auction, the central Bank of Nigeria (CBN) sold $130 million at 155.78 to the dollar, compared with $200 million sold at the same rate at the last auction on Wednesday.
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