Forex Pressure Mounts As Naira Hits N210 Per Dollar

The value of the naira continued to take a bashing as it dropped further at the beginning of business this week to N191.25 at the interbank and N210 at the bureau de change (BDC) despite dollar sales by the Central Bank of Nigeria (CBN) and oil companies.

The naira had closed last week at an all-time low of N190 at the interbank and N207 at the BDCs, after the CBN stopped banks from selling foreign currency to the BDCs and increased its weekly sales to the bureaus from $15,000 to $30,000.

The CBN held its first retail Dutch auction for the week yesterday and two oil companies, Total and Shell, also sold dollars but this only doused the tension for only a while. Dealers said Total offered to sell $80 million to some lenders yesterday while Shell sold an undisclosed amount of dollars to buy naira for their local operations.

Dealers at the foreign exchange market said the naira gained value after the dollar sales by the CBN and oil companies, selling as high as N186.80 to the dollar before hitting a low of N194.10 and a closing rate of N191.25 to the dollar.

The naira has hit a string of record lows as dollar liquidity on the interbank foreign exchange market thins out amidst a collapse in the price of oil, Nigeria’s main export. Oil price is down to $48 per barrel even as Nigeria’s external reserves hovers at $34.45 billion as at January 23, 2015, according to figures released by the CBN.

The apex bank last week offered $400 million at the two retail Dutch auctions held on Monday and Wednesday but sold $373.65 million, asides undisclosed amounts it sold during its interventions.