Naira falls on in­creased dol­lar de­mand

Daily Trust - - REUTERS -

Nigeria’s naira cur­rency weak­ened against the dol­lar on the in­ter­bank mar­ket yes­ter­day, with the dol­lar in de­mand as im­porters sought to meet their for­eign ex­change needs.

The lo­cal unit closed at 162.30 to the dol­lar, weaker than 161.75 Tues­day’s closed.

Traders said dol­lar sup­ply from oil com­pa­nies and off­shore in­vestors had dried up, leav­ing the mar­ket with less dol­lar liq­uid­ity in the face of in­creased de­mand from im­porters and oth­ers.

“There is no dol­lar in­flow from oil com­pa­nies while dol­lar de­mand com­ing from im­porters tak­ing ad­van­tage of cheaper dol­lar put pres­sure on the avail­able green­back in the mar­ket,” one dealer said.

The naira traded around 160.90 to the dol­lar last week, boosted by dol­lar in­flows from oil com­pa­nies and off­shore in­vestors buy­ing lo­cal debt, prompt­ing some users to in­crease their de­mand to hedge against fu­ture de­pre­ci­a­tion of the cur­rency.

Traders said the naira could de­pre­ci­ate fur­ther to around 163 to the dol­lar if sup­ply re­mains weak.

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