By Babajide Komolafe

The Naira depreciated further in both the official and interbank segment on Wednesday as the the Central Bank of Nigeria (CBN) failed to meet demand at the bi-weekly auction.

At the official segment the naira depreciated by 20 kobo, where the official exchange rate rose to N153.38 per dollar from N153.18 per dollar on Monday. At the Interbank sgement, the naira lost 90 kobo as the interbank exchange rate rose to N157.1 from N156.2 per dollar.

Kunle Ezun, an analysists at the Financial Market Dealers Association (FMDA) attributed the continued depreciation of the naira since the beginning of the month to lack of supply from autonomous sources, and failure of the CBN to meet demand at the bi-weekly foreign exchange auction.

It was gathered that since the beginning of the month, there have been no foreign exchange sale by oil firms, which are the major source of autonomous supply in the interbank market.

Also, in the last foreign exchange auction, the amount of foreign exchange sold by the CBN has been lower than the amount demanded.

On Wednesday, the apex bank sold $300 million while demand was $332.536 million. The amount demanded represents 5.6 per cent when compared with $352.335 million demanded on Monday. Last week, the CBN sold $600 million while $660.4 million was demand.

On the international front, the euro dropped against most major counterparts, reaching a three-week low versus the dollar, as speculation European leaders are slowing the drive to grant Greece additional aid fueled concern the nation may have to restructure debt.

Currencies of commodity exporters weakened and the dollar gained as raw-materials prices and stocks slid. The pound rose against most of its major counterparts as the Bank of England said U.K. inflation may reach 5 percent this year. German Chancellor Angela Merkel said yesterday Greece needs to continue with budget cuts to deserve an extension of its rescue package.

“The euro hasn’t shown much bounce in this corrective move; people might be cautious that there could be a further move to the downside in the euro,” said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York. “It seems there is a bit of a risk-off type of move. We’re seeing a little bit of a firmer dollar today.”

The euro tumbled 1.3 percent to $1.4216 at 1:23 p.m. in New York, from $1.4409 yesterday. It touched $1.4198, the lowest level since April 18. The European currency fell 1.4 percent against the yen to 114.89, from 116.54 yen. The dollar was little changed at 80.84 yen after rising earlier to 81.33 yen.