The naira weakened against the dollar from 294.37 at the interbank market on Wednesday to 310.43 on Thursday, crossing the 300 mark for the first time at the interbank market after the Central Bank of Nigeria floated the naira.
The naira fell by 5.4 per cent against the greenback to 309 at 1224 GMT on dollar supply shortages, Reuters reported.
It later recovered to close at 292.40 on the interbank market on thin trades. The interbank market traded a total of $7.27m.
Traders were expecting the central bank to intervene to ease dollar shortages, which did not materialise.
They said the CBN had not intervened for most of this week. Instead it was mopping up naira liquidity to support the currency.
After market closed at 1300 GMT, a total of $7.10m trades were done as low as 330.50 naira to the dollar.
“Now that the market has adjusted upwards it seems people are comfortable and that’s why we are seeing some trades,” one trader said.
Banks had been quoting the dollar at 281 to 285 naira after the central bank lifted its 16-month-old peg of N197 to the dollar last month.
According to traders, the lack of liquidity at those levels has curbed activity, leaving the central bank as the main supplier of dollars.
The naira traded flat on the black market to 375 against the dollar on Thursday.
Source:© Copyright Punch Online