Nigerian naira falls vs dollar on rising forex demand
Wednesday February 29, 2012
The Nigerian naira weakened against the U.S dollar on Wednesday on a resurgence of dollar demand at the interbank market, but it remained unchanged at the official foreign exchange window.
The naira closed at 157.78 to the dollar on the interbank market, weaker than the 157.65 it closed at on Tuesday.
Traders said increased dollar demand linked to the relative strength of the naira in the past three weeks was draining liquidity in the market, putting pressure on the local currency.
Traders said a unit of ExxonMobil sold about $58 milion to some banks, but failed to provide support for the naira.
On the official window, the central bank sold $150 million at 155.90 to the dollar, compared with $138.70 million sold at 155.90 to the dollar on Monday.
"We see the naira gradually depreciating toward the 158 naira mark this week unless we have more dollar inflows into the market from offshore investors or some oil multinational companies," a dealer said.
The naira has sustained strength against the dollar in the last four weeks because of an increase in dollar inflows from oil multinational companies and offshore investors in local debt instruments.
It also gained because most petrol importers have cut back on buying dollars to buy imported fuel pending a paliamentary investigation into corruption surrounding government fuel subsidies.