The nation’s currency, the naira, on Tuesday weakened further against the US dollar by N1.50k/$ or 0.81 percent at the inter-bank market.
After trading on Tuesday, the local currency closed at N184.60k/$ compared to N183.10k/$ the previous day at the inter-bank foreign exchange market, data from Financial Markets Dealers Quotations (FMDQ) have revealed.
The depreciation follows the closure of the bi-weekly Retail Dutch Auction System (RDAS) by the Central Bank of Nigeria (CBN) due to the festive period.
The implication of this, dealers said, is that there was not enough dollar to meet the rising dollar demand by the end users.
Naira took a loss position on Monday at the resumption of the inter-bank foreign exchange segment losing N1.92k to the US dollar to close at N183.10k/$.
Meanwhile, external reserves has continued to deplete as it declined by 0.70 percent to $34.52 billion as at December 29, 2014 from $34.77 billion as at December 24, 2014, according to data obtained from the CBN website.
Naira has depreciated N21.22k/$ or 13.26 percent to N181.18/$ from N159.96/$ year to date (y-t-d) at the interbank market.
A breakdown of the performance of naira during the year under review shows that on a year-to-date basis, the local currency has weakened by 9.30 percent or N14.30 at the official market segment to N168.00/USD as at December 24, 2014 from N153.70/USD.
At the BDC segments, the foreign exchange rate band depreciated by 11.11% or N19.00 to N190.00/USD from N171/USD, while at the parallel market, it slide 10.40 percent or N18.00 to N191.00/USD from N173/USD.
However, the spread between the RDAS and interbank market was N17.50, while the spread between the RDAS and the bureau de change market was N20.50. At the interbank market, the recent CBN suspension of “open position” limit for banks succeeded in calming the market as the local currency last week appreciated 0.57 percent to 185.50/USD.
Source : BusinessDay