The naira continued its upswing against the United State dollar at both the Central Bank of Nigeria’s (CBN) Wholesale Dutch Auction System (WDAS) and the interbank market as demand for the greenback fell drastically yesterday.

Data posted on the CBN’s website showed that at the bi-weekly auction held yesterday, the apex bank sold only $145.27 million as against the $250 million it offered to the market.

Consequently, the remarkable drop in demand for the greenback lifted the local currency by 30 kobo, as it closed at N156.10/$1 yesterday; compared with the N156.40/$1 it was last Wednesday.

The naira also appreciated by 10 kobo at the interbank as it closed at N157.60/$, higher than the N157.70/$1 at Friday's close. Analysts maintained that the drastic reduction in the demand for the greenback was responsible for the growth in the local currency.
Meanwhile, the Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, has said that the implementation of the new cash policy by the Central Bank of Nigeria (CBN) would significantly raise broad money supply (m2) in the system by 25 per cent.

Rewane stated this in his bi-monthly economic and business update made available to THISDAY. He revealed that growth in monetary aggregates was mainly a result of growth in credit to the private sector.

“The cashless economy reform will result in an increase in the velocity of circulation, which measures the rate at which money changes hands. The velocity is expected to increase as transactions are carried out electronically and therefore have a one-day value date as against three days from the original norm,” he added.

Rewane also noted that there had been a decline in exchange rate volatility in the first half of February even as the naira appreciated by 0.2 per cent in the spot market. However, the naira gained at the other segments of the forex market as it appreciated by 1.43 per cent and 0.60 per cent in both the inter-bank and parallel markets.

The FDC boss also said the sale of dollars at by the oil majors such as the Nigerian National Petroleum Corporation (NNPC), Shell amongst others, had played a significant role in reducing the demand pressure for the greenback.