ABUJA – The naira weakened further against the U.S. dollar on the interbank market, yesterday, as strong demand for the dollar persisted in the face of static supply, traders said.

The naira closed at N 153.80 to the dollar against N 153.54 on the previous day as the Central bank failed to meet all the dollar demand at its bi-weekly auction. At the official window, it sold $250 million at N150.71, compared to $342.34 million demanded. On Monday, it sold $250 million at N150.56.

Traders said dollar sales by units of Royal Dutch Shell and Exxon Mobil were not enough to satisfy the market, yesterday.

“Ideally, we expect the naira to appreciate this week as a result of dollar sales by most energy companies, but it seems strong demand has weakened the impact of the inflows,” one dealer said.

Most oil companies operating in Nigeria sell dollars around the end of every month to obtain naira for local obligations; dealers estimated such inflows since last week, which have included dollar sales by NNPC, at about $500 million.

But the inflows have not been enough to balance heavy dollar demand, which dealers and analysts said might have been partly due to a rise in imports of refined oil products, and an increase in their price. The rise in international crude oil prices may not yet be benefiting Nigeria because it is locked into long-term contracts, while any additional dollars obtained from crude oil exports may not be remitted to the country immediately.

There may also be some short-term investment outflows from Nigeria; the main stock index has dropped nearly 8 per cent from a late January peak, partly because of a slide in bank shares.