Naira Eases against Dollar amid Strong Demand

On Wednesday, June 04, the naira eased against the U.S. dollar as the greenback were bought on the interbank market by banks as a result of insufficient supply from offshore investors participating at a bond auction, said dealers.

The local unit closed at N162.70 to dollar, 0.12 percent weaker than N162.50 it closed the previous day. This is according to dealers, happened amid strong demand against disappointing dollar flow from offshore investors buying local debt.

‘’Demand for dollar was strong against limited supply, especially from offshore investors at the auction’’ said a dealer.

Some bank sold down their positions with the expectation of dollar flow from offshore funds buying treasury bills on Wednesday, which materialised in trickles.

A dealer disclosed that N137.97bn ($848.99mn) worth in treasury bills of 3 month and one year tenor was offered by Nigeria on Wednesday, but offshore participation was not as significant as it had been in previous auctions.

To help provide liquidity and possibly strengthen the local currency, dealers are expecting the state-owned oil company NNPC to sell part of its month-end dollar in the coming days.