Naira falls to year low of N163.3 per dollar

By The Rainbow

Nigeria's legal tender, Naira, was heading for  its lowest closing level in more than a year, in the absence of Central Bank of Nigeria's intervention and foreign-exchange sales from oil companies.

The currency, which had lost ground to the dollar in the foreign exchange market for the third day running, had declined 0.7 per cent to 163.35 per dollar Thursday afternoon in Lagos.

It had not experienced such huge slide since June 2012 on a closing basis.

The naira has fallen 4.4 per cent against the dollar this year, according to data compiled by Bloomberg.

'Foreign exchange sales from oil companies have so far remained benign this week' and 'offshore support has certainly dissipated given the current global environment,' Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd. in London, said in e-mailed comments.

'The market expected that the Central Bank of Nigeria would intervene and sell dollars directly to the banks, but this didn't happen.'

Debate among Federal Reserve officials over whether to reduce monetary stimulus has roiled financial markets since May. Oil companies in Nigeria, which sell the U.S. currency mainly at the end of the month to pay domestic expenses, are the second-biggest supplier of dollars after the CBN.

The regulator auctions foreign exchange on Mondays and Wednesdays. It sold $563.5 million this week, compared with $548.4 million in the previous five days. The CBN occasionally sells dollars directly to lenders on the interbank market outside of its weekly auctions.

Nigeria's foreign- exchange reserves have slid four percent to $46.9 billion on August 27 from a high this year of $48.9 billion in May, according to central bank data.