Naira Falls To Lowest Level In 9 Weeks

The national currency the naira fell to its weakest in nearly nine weeks on the interbank market yesterday, after the central bank chose not to supply the extra dollars many banks were hoping for.

The naira closed at N162.25 to the dollar, the weakest since June 28 when it closed at 162.60. The local currency closed at 162.05 to the dollar on Tuesday.

Traders said the naira hovered around 161.95-162 earlier in the day on expectations that the central bank would sell dollars directly to banks, but when this failed to materialise, the naira trended lower.

The local unit of oil company, Shell sold some dollars to lenders but the amount sold was not announced before the market closed.

At its twice weekly forex auction, the central bank sold $263.7 million at 155.76 to the dollar, compared  to  $300 million sold at the same rate on Monday.

Nigeria’s central bank last month hiked the cash reserve requirement for public sector deposits to 50 percent, from 12 per cent in a bid to tighten naira liquidity and shore up its value, but it has failed to stem the currency’s decline.

Source: Leadership