Naira Weakens as Dollar Supply Drops

The low supply of greenback led to the depreciation of naira against the United States dollar at the forex market segment last week.

At Bureau De Change (BDC), the naira fell by N2 to close at N169.00 to a dollar, while it depreciated by 13 kobo to close at N163.05 to dollar at the interbank market on Friday.

The nation’s currency also dropped at N168.50 to a dollar at the parallel market.

However, at the Retail Dutch Auction System (RDAS), the Central Bank of Nigeria (CBN) trimmed the volume of dollar sales at its regulated forex market last week.

Thus, the central bank offered a total of $650mn during the week. While it offered $300 million last Monday, it subsequently increased the amount to $350mn last Wednesday.

But based on available bids, an aggregate of $642.8mn was eventually sold, thus reflecting supply-demand balance in the forex market. The marginal rate during both auctions remained at N155.73 to a dollar.