Nigerian naira weakens vs dollar on fuel import bills
Monday March 19, 2012
The Nigerian naira weakened marginally against the U.S dollar on the interbank market on Monday as a unit of ExxonMobil sold around $54 million to some lenders, which ofset pressure on the local currency by gasoline importers.
The naira closed at 157.64 to the dollar on the interbank, compared with 157.60 to the dollar on Friday.
Traders said pressure on the local currency has increased since the government issued permits to 42 marketers to import fuel in the second quarter.
Most of the gasoline importers are restricted from buying their dollar needs at the official window, limiting them to source for their dollar needs on the interbank market.
"We have seen increased demand for the dollar on the interbank with the issuance of import permits to fuel marketers two weeks ago, putting pressure on the naira," one dealer said.
Traders said consistent dollar sales by some energy companies and inflows from offshore investors helped stabilise the naira against the dollar in the face of rising demand for foreign exchange.
Traders said the naira should trade above the 158 to a dollar this week, as dollar liquidity dries up, unless there are additional dollar inflows from oil companies or offshore investors.
On the bi-weekly foreign exchange auction, the central bank sold $200 million at 156.06 to the dollar on Monday, same amount and rate at the last auction on Wednesday.