By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-The naira on Friday recorded its biggest monthly decline in over five (5) years this February, a Reuters report quoted dealers as saying.
The report said dealers cited concerns over political uncertainty and the Central Bank of Nigeria’s (CBN’s) inability to manage the currency amidst sliding oil prices.
According to the report, the naira shed 8.3 percent to the dollar in February, quoting dealers, worse than a 6.9 percent fall in November last year after the CBN devalued the local currency by 8 percent in order to save its foreign reserves.
“However, reserves have fallen steadily and were down 8.6 percent by February 26 from a month ago, to stand at $31.46 billion after central bank stepped up support for the currency,’ the report added.
The report further affirmed that a sale was carried out on Friday just before the interbank market closed, at 198 naira for $82.9 million, Thomson Reuters data showed. Saying dealers attributed the trade to a dollar sale by the central bank.
Reuters noted that at its weakest, the naira was quoted at a record low of 206.60 to the dollar earlier this month, a decline of 20 percent since the start of November.
It said the Nigeria’s local currency crashed through a psychologically important level of 200 to the dollar this February in a rout triggered by sliding oil prices and escalating tension over the postponement of a presidential election prompting the CBN to scrap its bi-weekly forex auctions.
The Reuters report disclosed that Mobil Nigeria asked banks to bid for $15 million on Friday, as the oil company sought to buy naira to meet its local obligations, quoting dealers. “The results of the bidding are due out on Monday” the report added.
The CBN on February 18 scrapped its biweekly currency auctions and said it would sell dollars only at N198 revealing an actual devaluation of the currency; restricting dollar sales to only genuine and legitimate demands.
The CBN an e-mailed notice on Friday affirmed that the interbank rate as at the end of Friday closed at N198/$1 same as Thursday’s session.
