By Agency Reporter

Thursday, 25 Nov 2010

The naira eased further on the inter-bank market and at the official window on Wednesday as strong demand for the dollar put pressure on the local currency, traders said.

The naira closed at N150.85 to the dollar in the inter-bank market, compared to N150.65 to a dollar on Tuesday and weakened to N149 a dollar at the official window from N148.91 to the dollar at the previous auction, Reuters said.

At the bi-weekly forex auction on Wednesday, the Central Bank of Nigeria sold $250m at N149 per dollar, short of the $281m demanded and compared to $250m sold at N148.91 a dollar on Monday.

”There was a resurgence of strong demand for the dollar at the two segments of the forex market and this translated into the depreciation of the naira,” one dealer said.

Traders said the local unit of French energy major, Total, sold $36 to some lenders on Wednesday, but it was not significant enough to support the naira.

”The naira was actually held back from further depreciation because of market speculations on a plan by the state-run energy firm NNPC to sell about $350m to some banks,” another dealer said.

Traders said if the NNPC dollars hit the market soon enough, the local currency could firm before the end of the week.

Source: Punch