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Nigeria naira quoted weaker as funds exit bonds

Published 06/08/2019, 14:03
Updated 06/08/2019, 14:10
© Reuters. Nigeria naira quoted weaker as funds exit bonds

By Chijioke Ohuocha
LAGOS, Aug 6 (Reuters) - Nigerian naira NGN= was quoted at
363.50 on Tuesday, weaker than 362.80 a week ago, traders said,
as foreign investors exited local bonds and businesses
repatriated dividends.
The naira hit resistance at 363 last week, traders said,
saying that businesses with urgent dollar demand were bidding
the currency weaker to fill their orders. Traders said the
central bank was targeting dollar sales to foreign investors.
Pressure has been building up on the currency as oil prices
drop and as foreign investors book profits from local bonds
after yields fell on the debt market. A one-year open-market
bill auction fetched around 12% last month, down from as high as
18% a year ago.
"There hasn't been supply in a while, foreign investors are
exiting," one trader said.
Nigeria operates a multiple exchange rate regime. It
maintains an official exchange rate of 306.90 naira to the
dollar, supported by the central bank. The traded rate of 363.50
is the one widely quoted by foreign investors and exporters.
Another trader said the central bank was directing dollar
sale to foreign investors to help curb pressure on the currency
and keep the naira quoted in an orderly manner.
The bank has been intervening on the forex market over the
past two weeks to prop up the naira as foreign investors
exit.

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