By Babajide Komolafe
The naira again depreciated on Monday despite 50 per cent increase in foreign exchange supply by the Central Bank of Nigeria (CBN).
At the official market, the naira deprecated by three kobo while it lost 35 kobo at the interbank market.
At the foreign exchange auction conducted on Monday, the apex bank, in an apparent bid to forestall further depreciation of the naira, increased supply by 50 per cent to $600m while demand rose marginally to $586.4m from $584m.
The exchange rate however rose to N151.30 per dollar from N151.27 last week, indicating three kobo depreciation.
At the interbank segment, the exchange rate also rose to N155.7 per dollar from N155.45 the previous week.
On the international scene, the dollar strengthened as U.S. consumer spending increased more than forecast in February, and after Federal Reserve official, James Bullard, said the central bank may consider scaling back its monetary stimulus.
The yen weakened versus most of its 16 major counterparts on signs the global recovery is gaining momentum, boosting appetite for higher-yielding investments.
Policy makers should review whether to curtail plans to buy $600bn in Treasuries because of strong economic data, St. Louis Fed President Bullard said on March 26.
The euro depreciated for a second day against the dollar after German Chancellor, Angela Merkel’s, coalition was defeated in a regional election.
“If you take the Fed speak, coupled with positive data surprises, that could certainly support yields and in turn support the dollar against the yen or the euro,” said Mark McCormick, a New York-based currency strategist at Brown Brothers Harriman & Co. “It’s because of the relative shifts in two-year interest rates.”
The dollar strengthened 0.5 per cent to 81.75 yen as of 8:55 a.m. in New York.
The euro slipped 0.3 per cent to $1.4043, after reaching $1.4021, the least since March 18. The yen depreciated 0.2 percent to 114.80 per euro.