Naira drops, as market anticipates dollar supply

The naira has weakened further to 369 per United States dollar on the back of waning supply of the greenback in the foreign exchange market.   

Although the external reserves have reportedly hit $33bn, the Central Bank of Nigeria appears to be reducing its intervention, both in frequency and amount, in the foreign exchange market.

This development seems to have kept the local unit between 365/dollar and 369/dollar in recent weeks.

After closing flat at 365/dollar for one week despite interventions in the forex market by the CBN, the naira weakened to 367/dollar last Tuesday.

After trading flat at 367/dollar for a few days, the local unit closed the week at 369/dollar on Friday.

The CBN has managed to keep the exchange rate within the 365/dollar to 370/dollar band in the past few months, thanks to the billions of dollar it injected into the market during the period.