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WDAS: Naira depreciation persists, loses 24k


The depreciation of the Naira against the dollar persisted as the official and interbank foreign exchange on Wednesday.

At the wholesale Dutch Auction System (WDAS) session conducted by the Central Bank of Nigeria (CBN) on Wednesday, the official exchange rate rose to N153.62 per dollar from N153.38 on Monday, implying 24 kobo depreciation for the Naira.

Demand for foreign exchange etched down to $476.139 million from N478.79 on Monday while the CBN sold $400 million.

The inability of the apex bank to meet all the demand, however, increased demand pressure in the interbank market prompting the interbank rate to rise slightly to N156.58 per dollar from N156.545 on Tuesday.

This implies depreciation of 3.5 kobo for the naira.

It would be recalled that the naira opened the week with 20 kobo depreciation at the official segment and five kobo appreciation at the interbank market.

Last week, the naira lost 34 kobo to the dollar in response to accumulated unsatisfactory demand and low supply from autonomous sources.

At the international currency market, the pound fell to the lowest in two weeks versus the euro as minutes released today from the Bank of England’s most recent meeting showed more policy makers voted to keep interest rates at a record low this month.

Sterling was weaker against 15 of 16 major counterparts tracked by Bloomberg.

Ten-year gilts rose, pushing the yield to the lowest in seven months, as the minutes said officials voted 7-2 to hold rates and some saw the possibility of more bond purchases to counter weaker growth and inflation.

Short-sterling futures rose as investors curbed bets on higher borrowing costs.

“This is, on balance, a dovish minutes,” said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London.

“It’s consistent with a market view that the central bank will keep interest rates at the current level for a while because of the downside risks to the economy. That will weigh on the pound.”

Sterling was 0.6 per cent weaker at 89.26 pence per euro as of 2:20 p.m. in London after reaching 89.35 pence, the weakest since June 8. Sterling depreciated 0.7 per cent to $1.6125 and 129.16 yen.

The pound has lost 6.4 per cent in the past 12 months, according to Bloomberg Correlation-Weighted Currency Indexes, which track the currencies of 10 developed markets, making it the third-worst performer after the U.S. and Canadian dollars.


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