By Babajide Komolafe
LAGOS — The Naira depreciated further, Monday, at the Wholesale Dutch Auction System, WDAS, losing 160 kobo against the dollar.

On the international scene, the euro dropped for the first time in three days versus the dollar and yen as Italy’s borrowing costs increased at a five-year note sale, stoking concern its new government will struggle to contain debt turmoil.

Results of the WDAS session conducted by the Central Bank of Nigeria, CBN, showed that the official exchange rate rose to N154.4 per dollar from N152.81 in the last auction.

Consequently, the naira has depreciated consecutively for four weeks at the official market. The last time the naira appreciated was on Wednesday, October 12, when it appreciated by six kobo against the dollar.

Yesterday’s depreciation was triggered by a 30 per cent increase in demand for foreign exchange. Demand rose to over $600 million from $149.94 million in the last session. The amount demand was far in excess of the $250 million supplied by the CBN.

The excess demand prompted increased demand pressure at the interbank segment, causing the interbank rate to rise to N159 per dollar from N158.6, and hence 40 kobo depreciation.

A senior foreign exchange dealer, who spoke under condition of anonymity, said that the sharp increase in demand was due to the fact that the CBN has not been meeting demand at the official market. Investigations revealed that out of the eight foreign exchange auctions conducted by the apex bank between October 17th and yesterday, the CBN met demand only twice which were on October 17th and 26th.

On the international scene, the euro dropped for the first time in three days versus the dollar and yen as Italy’s borrowing costs increased at a five-year note sale today, stoking concern its new government will struggle to contain debt turmoil.

The 17-nation currency slid the most against the yen and South Korean won among its major counterparts tracked by Bloomberg. The Swiss franc weakened versus the dollar after a government report showed producer and import prices fell for a sixth month in October. The pound slipped as an index of U.K. employers’ hiring intentions retreated.

“You had the five-year Italian auction and it went OK, but the rate was quite high for Italy,” said Mary Nicola, a currency strategist at BNP Paribas SA in New York. “It’s still a strain on the market. The euro’s going to be guided by what happens in the bond markets.”

The euro depreciated 1.1 percent to 104.94 yen at 11:15 a.m. New York time, after rising 0.7 percent over the previous two sessions. The shared currency declined 0.8 percent to $1.3634. The yen gained 0.3 percent to 76.98 per dollar.

Currencies of commodity exporters dropped as stocks and raw-material prices fell. The Standard & Poor’s 500 Index lost 0.6 percent, and the Thomson Reuters/Jefferies CRB Index of raw materials fell 0.5 percent.