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Naira loses 21 kobo as forex demand rises by 137%

By Babajide Komolafe

The Naira  depreciated by 21 kobo against the dollar at the Wholesale Dutch Auction System (WDAS) session on Monday

naira sign

The depreciation of the naira was triggered by 137 per cent increase in foreign exchange demand which rose to $252.4m from $106m last Wednesday.

As a result, the official exchange rate rose to N148.51 per dollar from N148.3 the previous week.
The naira might continue to depreciate except there is increased foreign exchange inflow either from the CBN or autonomous sources like oil firms.

Last week, the Naira was quite stable in the four segments of the foreign exchange market with only marginal movements in the exchange rates.

At the official segment, demand slumped by almost half to $288.200m from $509.9m in the previous week.
As a result, the official exchange rate dropped to N148.3 from N148.4, indica-ting a 10kobo appreciation of the naira.
At the interbank segment, the exchange rate rose marginally N150.07 per dollar from N1409.96 while at the bureaux de change/parallel market segment, the exchange rate remained within the N151.5-N153 band.

Meanwhile, the Central Bank of Nigeria and Bank Negara Malaysia (Central Bank of Malaysia) has signed a Memorandum of Under-standing to share expertise and exchange relevant information in the areas of banking supervision, Small and Medium Enterprises (SMEs), microfinance, Islamic finance, monetary policy, development finance institu-tions, external reserve management, institutional arrangement for financial crisis management and resolution, foreign exchange administration, performance management and corporate strategy, leadership develop-ment and talent management.

The MOU was signed at the headquarters of the Bank Negara in Kuala Lumpur during a one-week study tour of Malaysian financial institutions by the Board of Directors of the CBN between 22nd-26th March.

The study tour enabled the team to understudy the success of the Malaysian regulator in the area of financial crisis management which has direct contextual relevance to the Nigerian situation.

Malaysia is a developing country that has achieved widely acknowledged economic success and the Bank Negara has had an effective financial stability framework since the Asian financial crisis in the 1990s.

The banking and financial reforms the country undertook successfully, provide a benchmark for the current banking reforms of the CBN.

Other areas of interest to the CBN include the stimulation of economic development through financing SMEs and effective supervisory frame-work for microfinance banks.


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