With the naira already selling at N164 at the interbank market, there are expectations that it would continue to be under pressure in the course of the year even as the foreign external reserves continue to deplete.
The Central Bank of Nigeria (CBN) uses the reserves to support the local currency and yesterday offered $400 million and sold $399.98 million at its twice weekly Retail Dutch Auction at a marginal rate of N155.75 to the dollar.
The nation’s external reserves which had been on a downward slide had continued depreciating and as at last week friday, February 7, 2014, the latest figure supplied by the apex bank, stood at $42.427 billion.
The CBN at the last Monetary Policy Committee(MPC) meeting had said it would only support the naira to an extent and would not bank on using the reserves to back up the currency but rather use other tightening measures.
Source : Leadership