Nigeria's naira weakened to a fresh 20-month low against the U.S. dollar on the interbank market on Friday, as direct central bank forex sales to lenders failed to meet demand, traders said.
| Naira and dollar exchanging hands |
The central bank sold dollars to some lenders directly towards the end of trading but the volume was not enough to calm the market and support the local currency, traders said.
Nigeria's central bank in July hiked the cash reserve requirement for public sector deposits to 50 percent from 12 percent, in a bid tighten naira liquidity and shore up its value.
Strong demand for dollars by offshore investors selling off local debt and stocks has added pressure on the local currency.
The central bank said on Tuesday it would resist pressure to devalue the naira since it has ample foreign exchange reserves to defend the currency.
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