Breaking News

Naira depreciates by 0.1%


The Naira, yesterday, fell for a second day as oil companies were said to have refrained from selling dollars in the market.

The Central Bank of Nigeria (CBN), upped foreign exchange at the first of its bi-weekly WDAS to $150 million. Like the last auction where the CBN sold all $50 million on offer, the entire $150 million on offer was sold yesterday as the Naira depreciated marginally by 0.01% to close at N155.75/US$ at the official window.

Foreign exchange sales by the CBN had declined substantially at recent auctions riding on dollar sales by oil majors in the autonomous market. The impact of the thinning dollar supply also reflected in the interbank market with the Naira dropping further by 34 kobo to close at N157.84 per dollar.

Jide Solanke, an analyst at First Securities Discount House Limited has said: Expected dollar sales from the Nigerian National Petroleum Corporation has not come through. The Central Bank has not been selling much.”

Oil-producing companies, which sell dollars to meet domestic expenses, are the second-biggest source of foreign currency after the Central Bank which sells dollars on Mondays and Wednesdays to keep the naira within a 3 per cent band around 155 per dollar.

Furthermore, trading in the T-Bills market was dominated by soft-selling with yields inching higher across most tenors reflecting tighter liquidity after last week’s  Open Market Operation (OMO) auctions totaling N200 billion.

The market remains cautious as traders await October Inflation data. “We anticipate an uptick in headline inflation to 11.9 per cent Year on Year ( YoY) from 11.3 per cent  YoY in September, reflecting higher food inflation. Market will likely trade sideways with possible soft selling till the data is published on Friday. We note there are expected T-Bill maturities of NGN87 billion in the course of week which should bolster market liquidity in the absence of further tightening” Vetiva Capital Management stated.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.