There was also a reduced supply from the Central Bank of Nigeria (CBN) at its Retail Dutch Auction.
“As long as the pressure we’ve been seeing on the currency slows down, as we’ve observed for the past few weeks, that will keep the pressure that has been seen at the Central Bank of Nigeria (CBN) window’s a bit moderate for some time,” Steve Osho, trader global market, Stanbic IBTC bank told CNBC Africa.
According to Osho, the dynamics of changing from the Wholesale Dutch Auction System (WDAS) to the Retail Dutch Auction System (RDAS) is going to change the volume seen at that window.
“In terms of demands coming for the co-operate institutions, nothing has changed much, just the process of actually getting the demands across to CBN and following the process of going to present the legit customers,” Osho explained.
One major factor of the persistent pressure on the naira seen last week was that foreign investors were bringing in less dollars than the market normally received. That however, can be attributed to all the happenings with the US budget and the US fed deciding not to taper. Nonetheless, normal demand has been restored.
“The demand is there from the offshore perspective because when the currency appreciates to the 159 to 160 levels, we see a lot of demand coming in through from offshore portfolios,” said Osho.
When there’s a slight depreciation over a period of time, it will be levelled from 161 to 162 naira, there’s a bit of slowdown from offshores who are actually demanding for some of these US dollars to be traded.
"Again, in the interbank markets as the supply coming from oil regions continue to flow into that market, we’ll continue to see that market within those bands of 159 to 161."