The naira/USD exchange rate may witness an upward pressure this week on the back of sustained high dollar demand by end users, fall in global crude oil prices and recent decline in external reserves, analysts have said.
The price of crude oil (Bonny Light) has dropped by 8.09 percent to $100.74 per barrel as at September 5, 2014 compared to $108.83/barrel in March 2014.
External reserves fell by 0.05 percent to $39.58 billion as at September 3, 2014 from $39.60 billion on September 2, 2014. It, however, rose to $39.65 billion as at September 5, 2014, according to data obtained from the Central Bank of Nigeria’s (CBN) website.
“This week, we anticipate upward pressure on the naira/USD exchange rate on the back of sustained high dollar demand by end users, down pressure on global crude oil prices and recent decline external reserves”, analysts at Cowry Asset Management Limited have said.
Last week, the local currency slightly depreciated by 0.25% (or N0.41) to N162.56/$1 at the inter-bank market. This was in spite of dollar sales by Shell (an undisclosed sum) while, local unit of Italian multinational, Eni, sold USD13 million. Also, local unit of Addax Petroleum sold USD 12 million. At other alternative market segments, the local currency appreciated by 0.30% (or N0.50) to N166.50/$1 at the bureau de change (BDC) market. Similarly, at the parallel market segment, the local currency appreciated by 0.30% or (N0.50) to N167.50/$1.
However, the CBN offered USD650 million but sold a total of USD648.83 million (or N101.04 billion) to end users at the Retail Dutch Auction (RDAS) – a 12.93% drop from the USD745.21 million (or N116.05 billion) sold in the preceding week. Hence, the official USD/naira rate held steady at N155.73/$.
