The naira fell against the dollar to its weakest in over a week on the interbank market as central bank failed to intervene in the market on Wednesday, traders said.
The local currency closed at 161.55 to the dollar, its weakest since June 14 when it closed at 162.7 to the dollar. The naira closed at 160.50 to the dollar the previous day.
“Demand for the greenback remain strong in the market, while the sales of $12 million by Agip was too little to support the naira,” one dealer said.
Traders said the central bank failed to sell dollars directly to some banks outside its regular twice-weekly auction as it had done in the last two weeks, causing the naira to lose value.
The Central Bank of Nigeria (CBN) had sold about $3 billion between May 22 and June 24 at its twice-weekly foreign exchange auction, plus an unspecified amount sold directly to banks, in its bid to reduce pressure on the local currency.
“We expect the naira to continue to lose value in the near term unless the central bank sustains its intervention in the market,” another dealer said.
At the regular forex auction, the central bank sold $300 million at 155.75 to the dollar, compared with $500 million sold at the same rate on Monday.
Nigeria’s foreign exchange reserves fell 0.16 percent month-on-month to $48.33 billion by June 24, the lowest level in more than three months, data from central bank showed on Wednesday.