Naira weakens against dollar despite CBN’s increased 33% forex offer
September 25, 2013 | 5:38 pm| | | Start Conversation
The naira Wednesday eased against the US dollar, losing 65 kobo at the interbank market in spite of increased foreign exchange offer by 33 percent from $300 million on Monday to $400 million Wednesday by the Central Bank of Nigeria (CBN).
The naira Wednesday closed at N160.05/$ compared to N159.40/$ the previous day, data from the Financial Markets Dealers Association (FMDA), have shown.
The CBN on Wednesday offered $400 million but sold $300.15 million to 14 deposit money banks at N155.75/$ at its bi-weekly Wholesale Dutch Auction System (WDAS).
Analysts believe that the naira depreciation may have been due to increased demand for the greenback by the end users.
Sanusi Lamido Sanusi, CBN governor after the September Monetary Policy Committee (MPC) meeting on Tuesday was worried over the existence of strong foreign exchange demand pressures coming domestically, which are not
necessarily linked to increase in the import of goods.
However, the naira firmed up at the official market gaining N0.01 kobo to close at N155.75/$ as against N155.76/$ the previous day. At the bureau de change and parallel market, the naira remained stable at N162.50/$ (bureau de change) and N163.00/$.
The money market on Wednesday experienced a liquidity squeeze as the Nigerian Interbank Offered Rates (NIBOR) increased across tenor buckets to 20.66 percent from 3.03 percent the previous day.
Consequently, call tenor climbed to 17.33 percent from 13.75 percent the previous day. Similarly, 7 days, 30 days and 60 days rose from 14.00 percent, 14.25 percent and 14.66 percent respectively the previous day to 17.08 percent, 17.37 percent and 17.66 percent respectively.
By: HOPE MOSES-ASHIKE
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