Naira falls at interbank market

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nairaThe Naira, which has lost more than 3 per cent of its value this year, fell to N165.75 against the U.S. currency, as offshore investors sold bonds and stocks.

The sells were part of a feared widespread pull-back following the U.S. Federal Reserve’s reduction of its stimulus, which had kept global markets awash with cash.

 

The central bank has continued to intervene in the interbank market to shore up the value of the naira, selling an undisclosed amount to lenders at various intervals to stabilise the currency from falling beyond the N160 mark.

 

But the interventions and its twice-weekly forex auctions have cost it around eight per cent of its hard currency reserves, which is now down year-on-year to $42.4 billion by February 7 and $42.0 billion as at February 12.

 

 

Although dealers were not concerned by the sack of four government ministers by President Goodluck Jonathan on Wednesday, political instability is often a worry for investors, especially as wasteful government spending tends to spike ahead of elections.

 

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