The Nigerian naira weakened to 151.20 to the U.S. dollar on the interbank market on Monday from 150.90 at last week’s close after demand outstripped supply at the central bank’s forex auction, traders said.
The central bank sold $250 million at 149.18 per dollar at Monday’s auction, short of the $303 million demanded and the $395 mln sold at 149.06 at the last auction on Wednesday.
“Demand for the dollar rose because of the short trading week. Some corporates that could not wait til next week to meet their obligations channelled their dollar needs through the interbank market,” one dealer said.
Nigeria, sub-Saharan Africa’s second biggest economy, has declared Thursday and Friday this week a public holiday to mark the end of Ramadan, the Muslim month of fasting.
Traders said energy firms had sold about $80 million to some lenders on Friday, which lent support to the local currency.
The naira could weaken further slightly this week because of the anticipated increase in demand for the greenback. Although the auction holds on Wednesday the funds would not be released until following Monday due to the holiday, traders said