By Babajide Komolafe
The naira appreciated further by six kobo  at the official foreign exchange market on Wednesday as demand fell by 19 per cent.

naira sign

Details  of the  Wholesale Dutch Auction System (WDAS) session on Wednesday reveals that demand dropped to $243.125m from $287.537m on Monday.

As a result, the official exchange rate dropped to N148.59 per dollar from N148.65 on Monday.
Earlier on Monday, the naira gained six kobo  from N148.71 per dollar despite 5.1 rise  in demand.
The naira also gained 14.25 kobo at the interbank market on Wednesday as the interbank exchange rate dropped toN155.55 per dollar from N151.6925 on Tuesday.

The appreciation of the naira in both segments of the foreign exchange market was fuelled by the improvement in supply by the Central Bank of Nigeria (CBN) which was more than the amount demanded by the banks.
For example, the apex bank offered $550 million this week while total demand was $530.662 million.
On the international scene, the pound rose against the dollar and euro as a report showed policy makers were split on whether to raise interest rates this month.

The pound also advanced against 14 of 16 of its most active counterparts on speculation that Chancellor of the Exchequer, George Osborne’s budget will help Britain safeguard its top credit rating without sacrificing growth.

The Bank of England’s minutes of Wednesday indicated that policy maker, Andrew Sentance, wanted an interest-rate increase at the most recent meeting, the first push for an advance in almost two years.

“Sentance’s view caught some in the market by surprise and it provided an excuse for the pound to remain well-bid,” said Roberto Mialich, a senior currency strategist at UniCredit SpA in Milan.

“This meeting took place before the emergency budget yesterday. It’s crucial to see if he will stick to this view next month after a deep cut in government spending.”

The pound, which has posted the greatest gains amongst major currencies against the dollar over the past two days, rose 0.5 percent to $1.4895 as of 5:16 p.m. in London. It appreciated 0.9 percent to 82.12 pence per euro after reaching 82.02 pence, the most since November 2008.

The U.K. has kept its main interest rate at a record low of 0.5 percent since March 2009.
The yield on the short-sterling futures contract maturing in March 2011 climbed six basis points to 1.12 percent as investors pared bets the Bank of England will keep down borrowing costs. It slid eight basis points yesterday.