Nigerian naira weakens v dollar, seen up on cenbank dollar sales

The Nigerian naira currency weakened further against the dollar on the parallel market on Tuesday on strong demand from travellers, traders said.
The local currency weakened to 224 a dollar from 222 closed the previous day and 221 it open in early traded, traders said.
"We have seen a surge in demand for the dollar from travellers and some businesses buying hard currency for purchases since Friday," Harrison Owoh, a bureau de change operator said.
The local currency had weakened on the parallel market to as much as 242 to the dollar last month, on persistent dollar demand after central bank limited importers' access to dollars on the official interbank market to buy a wide range of goods, in order to save its reserves.
However, the naira firmed to around 210 to the dollar two weeks ago after commercial lenders stop dollar cash deposits into customers' domicilary account, leading to excess dollar cash in the market.
The currency has since weakened to 222 a dollar last week after some endusers quickly mopped up the available dollar.
"We have received signal that the central bank will sell dollar to bureau de change operators twice this week; Wednesday and Friday and we hope to see the naira recover a little after the injection of additional dollar," Owoh said.
Nigeria's central bank sold an estimated $160 million to the bureau de change operators last week and set to repeat the same trend this week in a bid to increase liquidity and boost support for the local currency.
"The naira should appreciates in the coming days as the central bank also tighten naira liquidity in the banking system through its 48 hours advance payment for dollar purchases," Aminu Gwadabe, president of Bureau de change association told Reuters.
Nigeria's central bank last week directed commercial banks to pay for their dollar purchases 48 hours in advance, after banning them from accepting foreign currency cash deposits to curb dollar demand and stem illicit financial flows.
On the interbank market, the naira trading at 197 to the dollar, the level it has closed since last month.