Naira Suffers 182kobo Depreciation

The declining fortunes of the Naira continued, yesterday, as it suffered another 182 kobo depreciation at the foreign exchange auction conducted by the Central Bank of Nigeria, CBN.

The results of the bi-weekly auction showed that the official exchange rate rose to N158.41 to the dollar at the end of the session, from N156.59 at the last auction on Monday. This translates to 182 kobo depreciation for the Naira against the dollar, and the largest depreciation at the official market since November 2011. Cumulatively, the Naira has lost 202 kobo at the official market this week, and 265 kobo this month.

Meanwhile, the CBN yesterday reduced dollar sales at the official auction by 72 percent. Results of the bi-weekly Retail Dutch Auction System, RDAS, session held yesterday showed that the apex bank reduced dollar sale to $114.04 million, from $397.33 million sold on Monday. This represents the lowest dollar sale in any RDAS session since January 21st this year when the apex bank sold $100 million.

The reduction in dollar sales, and depreciation of the Naira, indicate that the CBN has decided to protect the nation’s external reserve instead of defending the Naira.