Naira records highest appreciation in two months

*Gains  60 kobo against the dollar

By Babajide Komolafe
The naira recorded the third consecutive appreciation yesterday, gaining 60 kobo against the dollar at the official foreign exchange market.Vanguard investigation revealed that the exchange rate dropped to N151.01 per dollar from N151.61 at the Wholesale Dutch Auction System (WDAS) session conducted by the Central Bank of Nigeria (CBN)

Naira sign

This represents the highest appreciation and the fourth for the naira againsst the dollar since Mallam Lamido Sanusi took over the leadership of the CBN.

Last week, the naira, for the first time in two months, appreciated twice against the dollar by 30 kobo. From N159.1 at the beginning of the week, the exchange rate dropped to N151.61.

Money market operators attributed the consistent appreciation of the naira to the declining demand for foreign exchange at the WDAS auction sessions as well as the fact that the CBN has been meeting foreign exchange demand.

Analysis of the WDAS result for the last weeks shows that foreign exchange demand declined by 17 per cent to $497.26 million from $599.81 million.

Meanwhile, interbank interest rate opened the week on an upward trend, a contrast to the 30 per cent decline recorded last week.
Investigation revealed that interest rate on Call lending rose to 11.91 from 10.86 per cent while Seven Days lending attracted 13.5 per cent up from 11.7 per cent.

Similarly, interest rate on Colateralised lending or Open Buy Back (OBB) rose to 8.0 from 7.2 per cent.
Last week, an inflow of 364 billion statutory allocation fund drove interbank interest rates down by 30 per cent.
Market operators, however, said that the impact of the inflow was mild and shortlived because the market was about N100 billion in deficit prior to the release of the statutory allocation funds.