Naira extends losses against dollar

 The naira extended its losing run against the dollar for a second day on Tuesday.

The naira traded 1.1 percent weaker at 285 to the dollar at 11 am, with $9 million traded. It, however, traded at N280 to a dollar at 1 pm.
The naira had slumped 30 percent on Monday.

The central bank caved into pressure to effectively devalue the naira in the wake of falling prices for oil, the country’s main export, announcing last week that it would abandon its 16-month-old peg at 197 to the dollar.

On Monday, the Central Bank of Nigeria sold $3.5 billion on the forward market after it auctioned $532 million and intervened on the interbank market to clear the backlog of hard currency orders worth around $4 billion.

CBNk sold $697 million in one-month forward, $1.22 billion in the two-month contract and $1.57 billion due in three months, in order to clear a backlog of $4.02 billion of demand, market operator FMDQ Securities Exchange said.

In May, Nigeria lifted prices of petrol by 67 percent to N145 a litre to eliminate the controversial subsidy regime and ease severe fuel shortages.
The government then used an exchange rate of N285 to the dollar to calculate petrol imports, which economists believed triggered the currency reform.

Other major oil producers, including Russia, Kazakhstan, and Angola, allowed their currencies to fall much earlier after crude prices collapsed.

Source:Guardian