Naira, Dollar notes
Obinna Chima
The naira fell marginally against the United States dollar at the interbank market on the first trading session for the second half of the year held yesterday on increased demand for the greenback.
Data from the Financial Market Dealers Association (FMDA) showed that the local currency shed 27 kobo to close at N163.12 to a dollar
Monday, compared with the N162.85 to a dollar last Friday.
Some dealers said the slide in the local currency could be as a result of the high demand for dollar by multinational remitting dividends to their parent countries as well as demand from fuel importers.
However, at the Central Bank of Nigeria (CBN)-regulated bi-weekly auction, the naira was stable as it maintained the N155.94 to a dollar it closed last Wednesday at the end of yesterday’s auction. The apex bank also offered $350 million to dealers, same as the previous session.
Meanwhile, FSDH Securities Limited has called for the quick resolution of the Eurozone sovereign debt crisis in order to avert negative consequences on global economic growth.
The financial advisory and investment firm argued in its latest weekly report that the euro zone is a major business partner with most regions of the world, stressing that weak economic growth prospects in Europe would have negative impact on Nigeria’s external balance position.
“Although the expected growth for Nigeria seemed impressive, there is a need for adequate attention to the infrastructure gap in order to take maximum advantage of the huge potentials in the non-oil sector of the Nigerian economy,” FSDH added.
“Assuming that conditions in high-income Europe do not deteriorate markedly, the increase in tensions so far can be expected to subtract about 0.2 per cent from euro-area growth in 2012.
“The direct effect on developing countries growth will be smaller due to less contagion, but increased market fears, reduced capital inflows, high income countries fiscal and banking sector consolidation are all expected to keep growth weak in 2012.
“These drags on global growth are expected to ease somewhat, and global growth is anticipated to strengthen during 2013 and 2014, although both developing and high-income countries Gross Domestic Product will grow less quickly than during the pre-crisis years of this century,” FSDH quoted a World Bank’s Global Economic Prospects report for June 2012.
It also argued that market tensions had jumped up once more, due to the fiscal slippage, banking downgrades, and political uncertainty in the euro zone. According to the report, the renewed market nervousness had also caused the price of risk to spike upwards globally, as shown in declines in stock market indices.