LAGOS: The Nigerian naira fell 0.62 percent against the dollar on the interbank market on Monday, as dollar demand outpaced supply in the absence of any central bank intervention or dollar sales from oil companies.
The naira closed at 161.8 to the dollar on the interbank, compared with the 160.8 to the dollar it closed at on Friday.
Traders said the Nigerian Liquefied Natural Gas company (NLNG) had called for bids earlier, but in the end sold no dollars in the market, worsening the dollar shortages.
NLNG has been unable to sell gas cargoes since late June, because of a dispute over levies with the maritime security agency.
Nigeria's currency has been under pressure as offshore investors continued to sell down their position in the local debt market and repatriate their proceeds over the last month.
The central bank sold $300 million at 155.76 to the dollar on its regular twice-weekly auction, the same amount and rate it sold at the previous auction on Wednesday. It did not sell dollars directly to banks on top of this to try to boost the local currency, as it has been doing in recent weeks.
"The naira is seen depreciating further to around 162 to the dollar this week unless the NNPC (state-owned energy company) sells dollars or central bank intervenes," one dealer said.
Traders said the NNPC, which usually sells dollars to some banks in the first or second week of each month, has delayed its sale, putting downward pressure on the naira.
Comments
Comments are closed.