Naira heads for third week Drop as Nigeria’s import demand rises

The naira fell for the fourth day against the dollar, heading for its third consecutive weekly decline as rising imports into the country increased the demand for the dollar to which the naira is tied.
The value of the naira depreciated by 0.2 per cent to N162.5 per dollar at the inter-bank market as of 11:23.in Lagos on Friday before the close of business thus taking its weekly drop to 0.6 per cent.
Nigeria imports into jumped 91 per cent to N9.3 trillion about ($57 billion) in the January to September period from a year earlier, according to a statement published on Wednesday, December 7 by National Bureau of Statistics. The Central Bank of Nigeria sold $200 million at its last auction in its twice-weekly foreign-currency auction on December 7, less than the $245 million asked by bankers. The last time bankers’ demand was met was November 30th.
“Strong foreign-exchange demand explains the recent depreciation of the naira on the inter-bank exchange rate market,” Yvonne Mhango, a Johannesburg-based sub-Saharan Africa economist at Renaissance Capital, wrote in a note. “It is very probable that the currently strong foreign exchange demand partly stems from festive season demand.”
The central bank on November 21 lowered the midpoint of its exchange-rate band at its twice-weekly auctions to N155 per dollar from N150. Rising imports and weakening oil prices, the source of more than 95 per cent of Nigeria’s foreign-exchange income, mounted pressure on the bank. Ghana’s cedi was unchanged at 1.6405 per dollar as of 10:22 a.m. in Accra.