Foreign exchange sales fell sharply by 69 per cent to $43.5 million at the bi-weekly auction conducted by the Central Bank of Nigeria (CBN) yesterday. Results of the Wholesale Dutch Auction System (WDAS) foreign exchange sales show that total amount sold fell from $142.968 million at the last auction, to $43.5 million, the lowest this year. The amount offered by the CBN also fell by 33 per cent to $100 million from $150 million.
The sharp decline in sales however did not affect the official exchange rate which remained N155.76 per dollar. Investigations revealed that the drop in demand at the WDAS was due to expectations foreign sales by oil firms this week. This expectation was reflected in the inter-bank foreign exchange rate which dropped by 22.5 kobo to N157.05 per dollar from N157.275 per dollar on Friday. On the international scene, the euro reached the lowest level in almost three weeks amid a growing divide over Europe’s new bailout strategy and data that showed the region’s three-year- old crisis is weighing on its economy.
The dollar and yen strengthened amid increased demand for refuge. The U.S. securities industry canceled equity trading on all markets today as Hurricane Sandy headed toward the New York City area. Retail sales in Spain dropped 11 percent in September from a year ago, a report showed, and the nation’s central bank set up a so-called bad bank. The euro touched a two-week low against the yen after German Finance Minister Wolfgang Schaeuble rejected another debt restructuring for Greece. “The market is in a mild risk correction, bidding the dollar across the board,” said Sebastien Galy, a senior foreign-exchange strategist at Societe Generale SA in New York. “It is an outcome of a market paring down and protecting its gains. Finally, everyone is trying to figure out the net economic impact of Hurricane Sandy and we may have to wait a while for this.”
