SAN FRANCISCO, February 09, (THEWILL) – The naira on Tuesday exchanged at N312 against the dollar following shortage of the greenback.
Consequently, naira depreciated in value against the dollar by N4.50k or 1.46 percent at the parallel market and lost N5 or 1.63 percent against dollar at the autonomous market.
After trading on the same day, the local currency closed at N312/$ compared with N307/& traded last week at the parallel market. It also closed at N310/$ as against N305/$ last week at the autonomous market.
At the inter-bank market, it also weakened slightly by N0.13k or 0.07 percent against the greenback, as it closed at N198.95k/$ from N198.82k/$ on Monday.
Nigeria’s interbank lending rate jumped to 2 percent on Tuesday from 1 percent on Monday, after the central bank directed commercial lenders to fund their naira accounts to enable them take part in its forex intervention on Thursday, Reuters report.
Overnight lending rates jumped 100 basis points as the movement of naira cash for forex purchases drained liquidity in the market.
The central bank intervenes once a week at the interbank foreign exchange market to provide dollar liquidity for some eligible importers.
Last month, the bank banned dollar sales to retail bureaux de change outlets, sending the naira to record lows on the black market, and later stopped daily sales to the interbank market, with the aim of conserving reserves, which are down to an 11-year low.
The local currency closed at N199.40/$ on the interbank market on Tuesday, around the peg rate of N197 to the dollar.
Nigeria’s interbank rate mirrors the level of naira liquidity in the banking system.
Traders said commercial lenders’ credit balance with the central bank opened at N978 billion ($4.94bn) on Tuesday before the bank called for funding for forex purchases. The central bank requires commercial lenders to fund their forex account 48 hours in advance of its intervention.
Story by David Oputah
