Nigeria’s currency, The naira fell to 363.50 on Tuesday, weaker than 362.80 at which it was quoted a week ago, as foreign investors exited local bonds and businesses repatriating dividends, according to traders.
The naira hit resistance at 363 last week, as businesses with urgent dollar demand were bidding the currency weaker to fill their orders. Traders said the Central Bank of Nigeria was targeting dollar sales to foreign investors.
Pressure has been building up on the currency as oil prices drop and foreign investors book profits from local bonds after yields fell on the debt market. A one-year open-market bill auction fetched around 12 per cent last month, down from as high as 18 per cent a year ago.
“There hasn’t been supply in a while and foreign investors are exiting,” one trader said.
Nigeria operates multiple exchange rate regime but maintains an official exchange rate of N306.90 to the dollar, back by the CBN. The traded rate of 363.50 is the one widely quoted by foreign investors and exporters.