Sanusi’s Removal Increased Forex Demand To $1billion in One Day
Thisday||The naira depreciated against the United States dollar last week as the suspension of Mallam Sanusi Lamido Sanusi as the Central Bank of Nigeria Governor triggered strong demand for the greenback by offshore investors
The development also saw financial markets reeling. But as a result of the development, the naira slumped against the US dollar in most segments of the forex market despite the central bank’s intervention last Thursday.
The CBN intervened by temporarily shutting down the interbank market on grounds of sudden spike in the exchange rate while also selling dollar directly to banks.
At its regulated Retail Dutch Auction System (RDAS), the central bank offered a total of $1 billion to end users, but sold $906.69 million. The amount sold was 51 per cent higher than the $596.72 million sold the preceding week.
However, the naira maintained its value at the RDAS as it closed at N155.75 to a dollar. The nation’s currency also weakened at the Bureau De Change (BDC) segment by N1 as it closed at N170 to a dollar while it fell by N1 to close at N171.50 to a dollar at the parallel market.
According to a report by Renaissance Capital (RenCap) at the weekend showed that given last Thursday’s suspension of Sanusi as the CBN governor, the interbank forex market predictably opened at N165.10 to a dollar last Friday. That was N2 above last Thursday’s closing levels. The report revealed that trading at the forex market was choppy while quotes were few and far between.