Nigeria naira at new record low after cbank sells dollars at its new band

Nigeria's naira hit a new record low against the dollar on Tuesday, sliding further away from the central bank's new target band as demand for the greenback continued unabated, dealers said.
The unit eased to a low of 187.55 naira on the interbank market in volatile trades shortly after the market opened, as dealers scrambled to fill demand orders not met at a central bank auction the previous day.
The central bank sold dollars at its new target mid-band of 168 naira at an auction on Monday and depreciated the currency by 1.78 percent from 165 naira it had auctioned it earlier, dealers said.
It sold around $169 million to commercial lenders at the auction, short of meeting demand for the greenback, dealers said, pushing the excess demand to the interbank market.
It usually sells between $200 million to $300 million at previous auctions.
"The market is reacting to the depreciation of the naira at the auction on Monday and central bank's inability to meet demand," one dealer said, adding that demand was coming mostly from importers.
The bank devalued the currency by 8 percent against the dollar a week ago in a bid to halt a decline in the foreign reserves of Africa's leading energy producer, but has since struggled to keep the currency in its new target range.
The target band since the devaluation is 5 percent plus or minus 168 to the dollar, but doubts remain about whether the devaluation went far enough given the likelihood of continuing low oil prices and the bank's ability to maintain the band will be tested in coming weeks.
The bank has been selling dollars to commercial lenders to try to prop up the currency, but dealers said it has not been sufficient to lift the naira, which is currently trading 5.5 percent below the lower end of the bank's new target band.