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Pressure Hits the Naira Forex Indications that the Nigerian currency, the naira, may depreciate against the United States dollar emerged yesterday as the Central Bank of Nigeria (CBN) was compelled to increase by some 30 per cent, the amount of foreign exchange it sold to banks by at the Dutch Auction System (DAS). But the naira however, gained 1 kobo against the United States' dollar yesterday to close at N132.84 per dollar. Having initially offered $80 million to banks, the apex bank was left with no other option than to sell $104,617,671.35 thereby overshooting its foreign exchange budget for the day. Specifically, the $104.6 million sold to 55 banks yesterday at the 210th edition of the DAS indicates a leap of some $21.8 million or 26.4 per cent against the $82,756,404.65 purchased in the previous trading session. This, in a nutshell means that the apex bank may be forced to depreciate the naira if the present volume of demand persists. Similarly, the demand for foreign exchange also advanced by 53 per cent or $46 million, from $86,365,170.49 to $132,402,858.37. Further analysis of the DAS results shows that unsuccessful bids accounted for $3,193,372.86, disqualified bids stood at $15,632,995.01 while bids from unfunded accounts was $8,958,829.15. Cumulatively, the $104,617,671.35 sold to banks by the banking watchdog yesterday, brings to $25.714 billion the total amount of foreign exchange that has been sold to banks by the CBN since the debut of the DAS July 22, 2002. Similarly, the $80 million offered to banks Monday brings the total amount of foreign exchange that has been offered by the CBN since the debut of DAS to $19.47 billion. Further analysis of yesterday's transactions, indicate that the highest bid rate remained unchanged at N134 per dollar, while and lowest bid rate rose from N130.05 to N132.84 per dollar. Reasons given by the banking watchdog for voiding some of the bids ranged from multiple bids, purpose not explicit, duplication of form 'M' number as well as prohibited items. At the export proceeds market, the average naira exchange rate stood at N133.65 per dollar at the close of business yesterday. At the parallel market, the average naira exchange rate moved by N1 to N140 per dollar at the close of business yesterday. Who Are We ? | About THISDAYOnLine.com | THISDAY People | Contact Us © Copyright 2000 Leaders & Company Limited

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