DEMAND WEAKENS NAIRA AT INTER-BANK AS WDAS RESUMES

http://www.nigerianbestforum.com/blog/?attachment_id=122126 After two weeks break, the Central Bank of Nigeria (CBN) resumed its bi-weekly foreign exchange auction yesterday, with huge demand for the dollar weighing down the value of the naira.

The naira depreciated for a second day as demand for dollars increased after the end of Christmas and New Year festivities.

The naira weakened by 0.2 per cent to N157.03 to a dollar at the inter-bank market, according to data compiled by Bloomberg, having lost 0.4 per cent last week.

Analysts at Lagos- based Cowry Asset Management Limited., led by Edgar Ebinum, had eailer noted that 'We expect to see a build-up in demand for foreign exchange as businesses resume. We expect to see pressure on the naira.'

The apex bank sold $150 million at the Monday auction at N155.77 to a dollar compared to $300 million which it sold at its last auction on December 19, 2012 at the same price.

Yields on the nation's $500 million of Eurobonds due January 2021 slid two basis points, or 0.02 percentage point, to 3.906 per cent. The rate on 10-year naira debt fell 15 basis points to 11.52 per cent, according to January 4 prices compiled and pasted on the Financial Markets Dealers Association website.

Central bank policy makers left the benchmark interest rate unchanged at 12 per cent last year. Nigeria's inflation rate rose for a second month in November to 12.3 per cent from 11.7 per cent, according to the National Bureau of Statistics.

Meanwhile, at the interbank market rates went in both directions with the shorter end rates rising while the longer end rates dropped. Call money on the Nigerian Interbank Offer Rates (NIBOR) rose to 11.375 per cent from 11.125 while 7-day money rose to 11.916 per cent from 11.875 per cent.

On the other hand, 30-, 60-, 90-, 180- and 360-day rates dropped to 13.25, 13.62, 14.04, 14.45 and 14.7 per cents respectively.