Naira Gains Marginally on Dollar Inflow

01 Feb 2013

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Naira notes

Obinna Chima

The naira gained marginally against the United States dollar at the interbank segment of the forex market Thursday, as a result of inflow of dollars from multinational companies in the country.

Multinational oil companies sell dollars to banks mostly at the end of every month to meet recurrent expenditure and other domestic spending.
The local currency climbed by 16 kobo to close at N157.20 to a dollar Thursday, compared to the N157.36 to a dollar it attained the previous day.

But data from the Financial Market Dealers Association (FMDA) showed that the naira was stable at the parallel market as it maintained its preceding day’s value of N159 to a dollar.

At the Wholesale Dutch Auction System (WDAS) held on Wednesday, the Central Bank of Nigeria (CBN) reduced its supply of the greenback by 20 per cent as it offered a total of $120 million to the 13 banks that participated in the auction, lower than the $150 million it offered on Monday.

The Monetary Policy Committee (MPC) had left all its monetary policy tools unchanged at the end of last week’s meeting.

CBN Governor, Sanusi Lamido Sanusi, also informed Bloomberg on the sideline of the World Economic Forum in Davos, Switzerland last week that the relative stability of the exchange rate and the fiscal direction of the Federal Government would be factors in determining the next direction of interest rates.

“We need to watch the continuation of the current stance of fiscal consolidation. High rates have delivered stable exchange rates, increase in reserves and stable inflation; I don’t think we should take that for granted,” he had said.

Sanusi forecast that January 2013 inflation numbers would be close to 10 per cent. “But we think that will be very much a reflection of base effects. We think that by and large, average inflation in 2013 will be lower than 2012, but keeping it at less than 10 percent for most part of the year will be very difficult,” he added.

Tags: Business, Nigeria, Featured, Naira, Dollar Inflow

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