Naira value slides on strong dollar demand

The naira slides to its lowest in a week against the U.S dollar at the inter-bank market on renewed demand for the dollar. This is coming despite large foreign exchange sales by Shell Nigeria. The naira fell to N161.30 to the dollar on the inter-bank, erasing recent gains and compared with its N161.05 close on Tuesday. The local currency firmed 1.2 per cent last week, after a surge of inflows from foreign investors positioning to buy treasury bills and the central bank’s dollar sales to banks. “Demand from some banks buying dollars for their customers was quiet large today, sucking the bulk of dollar liquidity in the market and pushing the naira value down,” one bank treasurer said. Bankers said Shell sold about $100 million to some Banks, but it was not sufficient to absorb demand.
On the bi-weekly foreign exchange auction, the central bank sold $180 million at N155.87 to the dollar, compared with the $163 million sold at the same rate on Monday. “There are speculations that the NNPC plans to sell dollars in the market this week and this could support naira recovery, otherwise it will be another round of depreciation,” another banker said.