31 January 2013

Nigeria: Naira Weakens As CBN Sells Dollars At 155.74

The value of the naira further depreciated yesterday as the Central bank of Nigeria (CBN) sold $120 million dollars at its bi-weekly auction at N155.74.

This was higher than the price it sold the foreign currency at its last auction when it auctioned $150 million at N155.73. At the interbank, the dollar sold for N157.36 as against 157.24 to the dollar on Tuesday.

The value remained at the same level at the bureau de change (BDC) and the parallel market where the currency went for 158.50 and 159.00 to the dollar respectively.

Traders at the market said they expected the value of the naira to inch up on month end dollar sales by oil companies.

"We expect to see increased month end forex sales by oil companies this week and this should help strengthen the naira to trade stronger above current levels", said Head of Markets at Sterling Capital Limited, Sewa Wusu.

The Central Bank of Nigeria kept its benchmark interest rate unchanged for the eighth time last week. The inflation rate in December eased to 12 per cent, from 12.3 per cent in the previous month, as the effects of flooding that damaged agricultural output last year began to subside.

The yield on the country's 16.39 per cent domestic bonds due January 2022 rose to 11.34 per cent in the secondary market, according to January 30 data on the Financial Markets Dealers Association website.

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