The naira on Thursday depreciated by N3.50k/$ or 1.7 percent to ex- change for N210.50k/$ compared to N207/$ the previous day at the parallel market, BusinessDay has learnt.
The intervention of the Central Bank of Nigeria (CBN) at the inter-bank foreign exchange market could not lift the naira as the nation’s currency on Thursday slide by N1.80k/$ or 0.95 percent.
After trading on Thurs- day, the local currency closed at N189.10/$ as against N187.30k/$ traded the previous day at the inter-bank market, accord- ing to data obtained from Financial Markets Dealers Quotations (FMDQ).
The CBN on Wednesday offered a total of $200 million and sold $249.98 million to some deposit money banks at the rate of N168/$ at the twice weekly Retail Dutch Auc- tion System (RDAS).
The NGN appreciated 2.5 percent against the USD at the inter-bank (-1.5% YTD) on January 28, 2015. Inter-bank appreciation was largely driven by USD supplies from state-owned enterprises mainly the Nigerian National Petroleum Corporation (NNPC), and the CBN.
Read also: Naira exchanges at N231/$ on strong demand from importers
The NGN remains under pressure due to falling oil prices, lower FX re- serves, and robust import demand. The outlook is significantly at risk from further oil price weakening, along with election-related spending pushing liquidity above target.
If CBN can manage liquidity successfully until February 2015 election, and also bridge the supply gap, inter-bank NGN will continue to trade between USD1:NGN185-190. Otherwise, it might trade between USD1:NGN190-195, Ecobank report indicated.
However, Godwin Emefiele, governor, CBN, has assured the Nigerian business community that the regulator is capable of meeting legitimate demand for dollar at the foreign exchange market.
While expressing confidence that the $34 billion reserve is able to finance seven months of importation, the CBN governor promised to monitor liquidity in the banking system with the aim of balancing indicators.
The CBN governor had in the last Monetary Policy Committee (MPC) meeting said, “But at this time, the naira is appropriately priced and there is no need for anybody to worry that there will be devaluation”.
