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Naira dips, now 159.90 to 1 US dollar

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LAGOS – The naira eased further against the U.S. dollar on the interbank market, yesterday, as end-users excluded from the bi-weekly auction bid for available dollars.

The naira closed at 159.90 to the dollar on the interbank market from 157.60 naira on Tuesday.

On the official window, the Central Bank of Nigeria, CBN, sold all of the $345.12 million demanded at N150.05 to the dollar compared to $350 million sold at 150.01 to the dollar on Monday.

CBN also sold dollars directly to some lenders on Tuesday as part of its regular intervention in the market, which helped the naira to gain temporarily on the interbank market, but it weakened later as no further dollar inflows hit the market.

A dealer said: “We are having increased demand at the interbank for dollars because of the decision of CBN to exclude some oil companies from the bi-weekly auction, yet there have not been commensurate inflows into the market.”

The apex bank, a fortnight ago, stopped petroleum dealers sourcing dollars at its official window for imports and restricted sales at its auctions to foreign firms taking the currency offshore because they can buy from the interbank.

Dealers said the series of measures by CBN to curb forex demand at its auction are squeezing greenback supply at the interbank.

According to another dealer: “The market remains a bit erratic because of tight dollar inflow, people are unwilling to give quote for the fear of trading below the market.”

Traders said the naira may not trade above the N160 mark this week as the regular dollar sales by CBN to some lenders will continue to provide some liquidity until month-end oil companies dollar inflows start coming in.

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