Nigeria - The Naira, Nigeria's local currency fell against the US dollar at both the parallel market and Bureau De Change (BDC) segment of the forex market due to huge demand that was put up by importers last week. A survey by THISDAY showed that the greenback fell at most parallel market points in Lagos.

Findings revealed that at various parallel market points at Marina, Lagos, the local currency which had traded within the N154 and N155 to a US dollar band since last month, fell to N156 to a US dollar last week.

Similar, at the BAS-DAN Bureau De Change, located at the International Airport, Ikeja, Lagos, the naira dropped to N155.50 to a dollar last week, compared with the N155 to a dollar it stood the previously. At parallel market points at Egbeda, Lagos, the local currency also traded at N156 to a US dollar on Friday, compared with the N155 to a dollar it stood previously.

Data from the Financial Market Dealers Association of Nigeria (FMDA) on Friday also confirmed the development as it showed that the local currency was bruised by 50 kobo as it sold for N155.50 to a US dollar over the N155 to a dollar it stood the preceding week.

Managing Director and Chief Executive, Slamad Bureau De Change Limited, Mr. Amaeze Olisaemeka, attributed the slide in the naira to an increased demand for the dollar by traders. Specifically, Olisaemeka insisted that huge demand which trailed the resumption of trade by Nigerian importers who trade with Chinainjured the naira

Olisaemeka explained: "The three week holiday declared by the Chinese government to celebrate their anniversary that led to the suspension of the Nigeria-China trade elapsed on February 15th and since then; we have noticed an increase in the demand for the dollar. While this holiday lasted, we noticed a lull in the market.

As you know, there has been a tremendous growth in the Nigeria-China trade because a lot of Nigerian business men prefer to go to China, which they believe is more favourable."

The pressure was further confirmed at the Central Bank of Nigeria (CBN) regulated Wholesale Dutch Auction system (WDAs), as the regulator raised the amount of dollar offered last Wednesday.

While a total demand of $329.508 million was put up by traders last Monday, the regulator offered only $250 million as the naira was traded at N150.84 to a US dollar. Following the huge demand observed on the first trading day of the bi-weekly auction, the regulator raised its offer to $400 million on Wednesday whereas a total of $367.796 million was demanded.

But, the local currency enjoyed a slight appreciation at the interbank market as it gained 9 kobo to N152.85 to a US dollar last Friday, over the N152.94 to a US dollar it achieved on the last business day of the preceding week.

Obinna Chima

This Day