Thursday, 18 September 2014

Naira Hits 3-month Low Despite CBN’s Intervention



The naira fell by 0.34 per cent to a three-month low of N163.45 to a dollar yesterday, despite the Central Bank of Nigeria’s (CBN’s) intervening for a second day to halt its slide. Data from Reuters showed that the nation’s currency fell as low as N163.70 to a dollar as a result of strong demand for the greenback during intra-day trade before the central bank's action helped it to recover to N163.45, a level last seen on June 16. The naira closed at N162.90 on Tuesday. On the other hand, THISDAY checks showed that the CBN offered a total of $350 million at its regulated Retail Dutch Auction System (RDAS) on Monday, but sold $349.8 million to forex dealers. The naira was however stable at N155.75 to a dollar at the RDAS and 22 banks participated in the auction. The consumer price index (CPI) which measures inflation rose for the sixth consecutive month to 8.5 per cent in August. Meanwhile, there was an increase in the average US dollar offered and sold by the CBN through the RDAS in August, compared to July. The increase in the amount sold by the CBN was due to the need to achieve stability in the value of the naira, from the increased demand in the market. The amount offered by the CBN in August stood at $2.85 billion, up by 5.56 per cent from $2.70 billion offered in July. The amount sold in August was $2.82 billion, an increase of 11.62 per cent from the $2.53 billion sold in July. The value of the naira remained stable at N155.73/$1 at the official market since mid-April 2014. Nonetheless, the average exchange rate in the interbank market appreciated marginally by 0.30 per cent to N162.03 to a dollar in August, from N162.51 to a dollar in July. In the parallel market, the average exchange rate depreciated by 1.54 per cent to N169.29 to a dollar in August, from N166.72 to a dollar in July.
Thisday Newspaper

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