Nigeria's naira fell against the U.S dollar yesterday as demand for the greenback outweighed supply at both the central bank's auction and the interbank market, traders said.

The naira was trading at 151.80 to the dollar on the interbank compared to 150.50 on Monday and 149.50 last Thursday.

The central bank sold $100 million at 149.09 naira to the dollar on Monday compared to 148.31 last Thursday. Dollar supply at Monday's auction also fell short of the $265 million demanded by end-users.

At the Bureau de Change yesterday, Naira was sold at an average of N155 against the dollar.

A CBN official told our reporter yesterday that the apex bank would do all it can to stabilize the value of Naira.

Dealers said the naira weakened mainly due to the failure of the central bank to meet all demand at its auction and the fact that oil firms' month-end dollar sales have been exhausted.

"The naira depreciated because there were no additional dollar inflows from independent sources to meet the shortage at the central bank auction," one dealer said.

The central bank had cancelled its auction last Wednesday due to lower than anticipated bids submitted by end-users, which also led to a sharp depreciation of the naira on the interbank.

Dealers said the naira could depreciate further in the week if the central bank fails to raise dollar supply at its auction on Wednesday.

"Dollar inflows from oil firms have dried up, making the central bank's auction the main source of supply for the rest of the year," another trader said.