by Akodu Oluwaponmile
The naira maintained its
Friday's value of N162.95 to a dollar monday. This was
attributed to a request by the Central Bank of Nigeria (CBN) that banks should
bid to sell the greenback, in a move to quell dollar shortages and support the
nation's currency.
The local unit opened at
N163.05 to a dollar and weakened further to N163.50 naira intra-day on strong
demand, prompting central bank's interest.
Dealers said news of the
proposed bid made some lenders sell dollars in order to participate as central
bank usually sells dollar at a discount to interbank market, helping the naira
recover to Friday's level.
"The central bank called round to get a feel of the
market … some banks saw this as a signal that the bank could
intervene,” one dealer said.
Dealers said dollar flows has
slowed after the Nigerian National Petroleum Corporation (NNPC), which accounts
for bulk of dollar supply on the interbank sold about $300 million last week.
But this failed to lift the local currency.
Meanwhile, the Renaissance
Capital (RenCap) in its latest report noted that Nigeria’s
recovering forex reserves, at $39.57 billion brings anticipated cut in interest
rate closer.
It argued that measures the
CBN had taken to “plug the holes” in forex reserves,
including the revision of the Bureau de Change (BDC) regulations, would help
conserve the nation’s external reserves.
“We no longer expect naira devaluation only some
depreciation as the February 2015 elections approach".
“We think a firmer currency will help dissipate
inflationary pressures and improve the likelihood of rate cuts,”
They added.
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