By Babajide Komolafe
Foreign exchange supply from autonomous sources most oil firms precipitated a 73 per cent fall in demand at the official market last week.

Analysis of the foreign exchange auctions conducted by the Central Bank of Nigeria (CBN) last week show that demand fell to $104.89 million from $399.31 million in the previous week.

Investigation   reveal the sharp fall was prompted by massive inflow of foreign exchange from oil firms. “The market is awash with foreign exchange liquidity from autonomous sources”, a senior bank foreign exchange dealer told Vanguard.

“The oil firms   have been selling regularly and this has made the market to be flooded with dollar”, he added
Reflecting the impact of the inflow, the Naira appreciated in the official and interbank foreign exchange market. At the official market the Naira appreciated by  125 kobo as the exchange rate fell to N148.50 per dollar from N149.75 per dollar.

At the interbank the Naira appreciated by  68 kobo as the exchange rate dropped to N150.3  per dollar from N150.98 per dollar.

At the international currency market, The dollar rose against most major counterparts as Dubai’s attempt to delay debt spurred investors to sell higher_yielding assets funded with the currency.

The yen declined against the dollar after touching a 14_ year high on speculation Japan will intervene after Finance Minister Hirohisa Fujii said he will contact U.S. and European officials about exchange rates if needed. The Bank of Japan checked rates at commercial banks in Tokyo, seen as a type of verbal intervention, Kyodo News Service reported. The dollar’s gain was reduced as global equity markets pared losses.

“It seems the market underestimated the implications of what came out of Dubai and we’ve seen a scramble to close down short_term positions,” said Paul Robson, a currency strategist at Royal Bank of Scotland Group Plc in London. “We’re seeing the dollar doing better but the risk sell_off is overdone.”

The euro fell to $1.4956 at 1:30 p.m. in New York, from $1.5019 yesterday and $1.4862 on Nov. 20. The yen fell 0.2 percent to 86.77 per dollar after climbing as high as 84.83, the strongest level since July 1995. The currency appreciated to 129.76 per euro, from 128.85, after reaching 126.91, the highest level since April 29.

The dollar rose against 13 of the 16 most_traded currencies, surging 1.7 percent versus the South Korean won and 0.8 percent versus the Australian dollar. The yen was mixed against most major currencies. The greenback’s gains were pared after equity markets in Europe erased earlier losses and the Standard & Poor’s 500 Index climbed from its low for the day.