By Babajide Komolafe
Hopes of improved fortunes for the naira was dampened  at the interbank foreign exchange market on Tuesday  where it lost 73 kobo to the dollar.

Meanwhile interbank interest rate further declined by six per cent on the average same day following expectation of inflow from statutory allocation to the three tiers of government.

Interest rate on Call lending fell to 4.5 from 12.1 per cent, on Seven Days it fell to 5.0 from 12.1 per cent, and on 30 Days it fell to 8.9 from 13.0 per cent.

On Tuesday, the interbank exchange rate rose to N152.48 per dollar from  N151.75 on Monday indicating 73 kobo depreciation. This completely eroded the 12 kobo appreciation recorded by the naira at the interbank market on Monday.

On Monday, despite 43 per cent surge in demand and six kobo depreciation at the official market, the naira appreciated by 12 kobo at the interbank market.

Investigation revealed that the sharp depreciation of the naira on Tuesday was occasioned by the unsatisfied  demand of $47.6 million in the official market on Monday

Analysis of foreign exchange auction through the Wholesale Dutch Auction System (WDAS) conducted by the CBN on Monday, indicated that demand rose to $447.6 million from $312.2 million the previous auction.

Investigation revealed that the sharp increase in demand was due to carry over of unmet demand from previous auction. For example unmet demand from auction conducted last week stood at $98 million.

The apex bank however rose to the occasion by increasing amount sold by 60 per cent to $400 million from $250 million.

This ameliorated the impact of the rise in demand on the naira as the naira depreciated marginally by six kobo at the official market, where the exchange rate rose to N149.06 per dollar from N149 per dollar the previous week. The naira however appreciated by 12 kobo at the interbank market as the interbank exchange rate dropped to N151.87 from N151.75 per dollar.


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