Bloomberg News

Nigeria Dollar Demand by Banks Beats Supply for 5th Auction

June 22, 2011

(Updates with previous auctions in first paragraph, comment from analyst in fourth.)

June 22 (Bloomberg) -- Nigeria’s central bank offered less foreign currency than demanded by lenders for a fifth straight auction today as the naira continued to depreciate against the dollar.

Nigeria, sub-Saharan Africa’s second-biggest economy, sold $400 million at a foreign-exchange auction, less than the $476 million sought by lenders, the Abuja-based Central Bank of Nigeria said in an e-mailed statement.

Dollars were sold for between 153.81 naira and 153.50 naira each. The marginal rate, which is also used as the prevailing exchange rate, was 153.63 naira, compared with 153.38 naira at the previous auction, held June 20.

“Traders have seen pressure in the foreign-exchange market in the past weeks and are buying on speculation” that the central bank might continue to not meet demand, Babatunde Obaniyi, a currency analyst with Afrinvest West Africa Ltd., said by phone from Lagos, the commercial capital, today.

The West Africa nation’s currency weakened on the interbank market today, declining 3 kobo to 156.55 naira per dollar by 6:41 p.m. in Lagos, according to data compiled by Bloomberg.

--Editors: Emily Bowers, Ben Livesey.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.


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