By Babajide Komolafe
The naira yesterday appreciated again by 29 kobo in the interbank foreign exchange market reflecting the surfeit of dollar supply in the market.

naira sign

From N150.74 on Monday, the interbank exchange rate fell to N150.45 per dollar. This represents the second consecutive appreciation of the naira in  the interbank foreign exchange market  this week.

On Monday, the naira appreciated by 44 kobo in the interbank foreign exchange market, the biggest in gain for the currency in June.

The interbank foreign exchange rate  fell to N150.75 from N151.19 per dollar. Vanguard’s investigation reveals that the interbank market is liquid  with dollars owing to the $392m supply from major oil firms last week including Nigeria National Petroleum Corporation (NNPC).

The naira is expected to remain relatively stable this week following further decline in foreign exchange demand in the official segment of the market.

This in addition to the $550m supplied by the apex bank last week, which was more than the $530.662m demanded at the official foreign exchange market occasioned low demand for foreign exchange in the interbank foreign exchange market.

It would be recalled that, last week, the naira gained 12 kobo at the official market and 34.25 kobo at the interbank market

On the international scene, the yen surged to the strongest level in eight years versus the euro on concern that slowing growth in China will hurt economic recovery and European banks face higher rates when they roll over central-bank loans.

The yen touched a seven-week high against the dollar and gained again all the most traded currencies after data showed U.S. consumer confidence dropped this month more than forecast, boosting demand for the Japanese currency as a refuge.
The Swiss franc reached a record high versus the euro as investors sought the perceived safety of the region’s strongest currency.

“The market is hungry for risk-free investments, and there are just not enough of them,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York.

“The euro debt crisis is continuing. The market is concerned about replacing one-year money for three-month money. The banks are going to have to keep coming back, and it raises the tendency for market fluctuations.”

Japan’s currency appreciated 1.8 per cent to 107.74 per euro at 11:37 a.m. in New York. It touched 107.32 yen per euro, the strongest since November 2001. The yen gained 1.1 percent to 88.38 per dollar, from 89.37 yesterday. It reached 88.29, the strongest level since May 6. Europe’s shared currency weakened 0.8 percent to $1.2185, from $1.2277.

The franc was at 1.3184 against the euro, from 1.3344 yesterday. It touched 1.3172 per euro, the strongest since the common currency’s1999 debut. The euro fell below 81 U.K. pence for the first time since November 2008, dropping as much as 0.7 percent to 80.71 pence.