Investing.com - Financial Markets Worldwide

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.

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.