Naira depreciates on importers’ dollar demand

The naira eased against the U.S. dollar on the inter-bank market on Wednesday as strong demand from importers of fuel and other goods drained liquidity in the market, traders said. The naira closed at 157.55 to the dollar, weaker than Tuesday’s close of 157.30. Traders said there was a surge in dollar demand on Wednesday from local importers against thinning supply, knocking the value of the naira lower.

At the official window, the central bank auctioned $207.66 million at 155.74 naira to the U.S. dollar, compared with $290 million it sold at the same rate at Monday’s auction. Dealers expect the local currency to trade within a 157.80-158 naira range to the dollar this week unless fresh inflows from offshore funds participating at a local bond auction on Wednesday materialises to boost the naira. Nigeria plans to sell 110 billion naira ($700 m) in bonds ranging between five- and 20-year maturities at its fifth monthly debt auction of the year on Wednesday.