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Naira dips against dollar on strong foreign exchange demand

The naira, yesterday, fell to its lowest in a week against the United States’ dollar on the interbank market as strong dollar demand outpaced thin supply from an oil company and some offshore investors into local debt.

The naira closed at 157.75 to the dollar, weaker than the 157.55 it closed at on Friday, but back at the level it was last Monday.

Dealers said unit of Addax petroleum sold about $10 million to some lenders on Monday, while dollar flow from offshore investors trickled into the market, but not enough to stem the depreciation.

The naira has been hovering at around 157-158 level for three weeks, owing to dollar sales by the Nigerian National Petroleum Corporation, NNPC, multinational oil firms and inflows from offshore investors buying local debt.

Dealers said the naira weakened to as low of 157.90 intraday because of buying by some importers, but closed at 157.75 after Addax released its bid result.

“We see the naira trending around the present level for the rest of the week because of anticipated dollar inflows from offshore investors, in a bond auction later in the week,” one dealer said.

Nigeria plans to issue N60 billion ($379.75 million) in local bonds, with maturities of between five and seven years at its regular auction on September 19.

At its bi-weekly foreign exchange auction, the central bank sold $130 million at 155.78 to the dollar, compared with $200 million sold at the same rate at the last auction on Wednesday.


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