Naira drops to 370 on lack of Dollar Supply
The Naira depreciated against the United States dollar at the parallel market on Tuesday to 370, down from 368/Dollar on Monday.
The local unit had closed at 367/Dollar on Friday. The development followed lack of Dollar sale by the Central Bank of Nigeria on Monday. The CBN has been supplying Dollar to the Forex Market through intervention on Mondays in the last few weeks. The Exchange Rate had hovered between 363/Dollar and 365/Dollar in recent weeks.
Economic experts said unless the CBN maintained its weekly supply of Forex into the market, it might find it difficult to keep the naira below 370/Dollar.
Stakeholders expect the regulator to announce the sale of Dollar before the week runs out. Meanwhile, the Debt Management Office is planning to raise N135bn ($442.62m) in bonds on August 23.
The DMO said on Tuesday it would sell N35bn of bonds due in 2021 and N50bn each of bonds due in 2027 and in 2037, using a Dutch Auction system. Settlement is expected two days after the sale. The bonds are re-openings of previous issues.
The Federal Government issues sovereign bonds each month to help fund its Budget deficit, support the local debt market and maintain a benchmark for companies to follow.
The Country expects a Budget deficit of N2.36tn this year as it tries to spend its way out of a recession. It expects to raise money to cover more than half the deficit from the local market