Naira hits year low as CBN, oil coys, fail to intervene

ABUJA – The naira retreated for a third day, its lowest closing level in more than a year, as the Central Bank of Nigeria (CBN) failed to intervene while there were no foreign exchange sales from oil companies.

The currency declined 0.7 per cent to N163.35 per dollar as its worst level since June 2012 on a closing basis. The naira has fallen 4.4 per cent against the dollar this year.

Naira and DollarAn emerging markets strategist at Standard Bank Group Ltd. in London, Samir Gadio, said “foreign exchange sales from oil companies have so far remained benign this week and offshore support has certainly dissipated given the current global environment. The market expected that the CBN would intervene and sell dollars directly to the banks, but this didn’t happen.”

Oil companies in Nigeria, which sell the US currency mainly at the end of the month to pay domestic expenses, are the second biggest supplier of dollars after the apex bank.

The regulator auctions foreign exchange on Mondays and Wednesdays. It sold $563.5 million this week, compared with $548.4 million in the previous five days.

The central bank occasionally sells dollars directly to banks on the interbank market outside its weekly auctions.

– NIGERIAN TRIBUNE

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