Nigerian naira eases as banks buy dollars

Nigeria's naira weakened against the U.S. dollar on Monday, as demand for dollars rose from units of two foreign banks covering oversold positions.

Sanusi, CBN Gov

The local currency weakened to 162.95 naira to the dollar on the interbank from Friday's close of 162.55 naira.
Traders said the naira weakened after two foreign banks bought dollars to cover short positions, triggering speculations that some offshore investors are still selling off their local debt holdings.
The naira fell to its weakest in four months last week after the U.S. Federal Reserve announced it would further reduce its bond-buying stimulus, which triggered sell-off of bonds in Nigeria and other emerging markets by offshore investors.
Traders said the naira is likely to reach 163 to the dollar in coming days, unless the central bank intervene in the market or the state-owned energy company NNPC sells dollar in the market.
"We expect the naira to cross the 163-to-a-dollar level this week ... even if the central bank sells dollar directly in the market, we don't see the naira strengthening to the 160 level soon," one dealer said.