Naira records slight depreciation at interbank market

The nation’s currency, the naira, on Monday fell slightly by N0.50k against the US dollar at the inter-bank foreign exchange market. After trading on Monday the local currency closed at N200.60k/$ compared to N200.10k/$ traded on Friday last week. At the parallel market, the naira gained N1.50k or 0.7 per cent over the dollar as it closed at N220/$ as against N221.50k/$ last week Friday.

There was no Retail Dutch Auction System (RDAS) on Monday as the Central Bank of Nigeria (CBN) had closed the same last week. Meanwhile, Addax sold $6 million on Monday while Royal Dutch Shell sold an undisclosed amount on the inter-bank, dealers told Reuters.

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Lenders resold to their customers at a spread. The naira crashed through a psychologically important level of N200 to the dollar this month in a rout triggered by weak oil prices and escalating tension over the postponement of a presidential election in Africa’s top oil producer, prompting the central bank to scrap its bi-weekly forex auctions. Dealers said some customers submitted their orders to the central bank after a 1200 GMT cut-off time and were not allotted dollars, leaving them to source hard currency from lenders.

The central bank scrapped its bi-weekly currency auctions on Wednesday and a market body said it would sell dollars only at N198, a move that amounts to a de facto devaluation of the currency of Africa’s biggest economy.