Bloomberg News

Naira at Almost 2-Month High May Gain 1.5% in ‘Weeks,’ BNP Says

June 29, 2011

June 29 (Bloomberg) -- Nigeria’s naira, trading at an almost two-month high against the dollar, may appreciate as much as 1.5 percent “in the coming weeks” after the central bank lifted curbs on inflows and restricted sales to foreign-exchange bureau operators, according to BNP Paribas SA.

“Although the naira is trading close to its highs for year, the reforms could help it to advance another 1 percent to 1.5 percent in the coming weeks,” BNP Paribas strategists led by London-based Bartosz Pawlowski wrote in a report today. “The central bank also announced a cap on the amount of U.S. dollars that Nigerian banks can sell to foreign-exchange bureaux. This is another change aimed at reducing the capital outflow and money-laundering.”

The currency of Africa’s top oil producer reached 153.9 per dollar in the interbank market today, the strongest level since May 5, before erasing gains and weakening 0.4 percent to 154.6 by 9:21 a.m. in Lagos, according to data compiled by Bloomberg.

The currency may strengthen to 145 per dollar by the end of the year after the Central Bank of Nigeria lifts a requirement for foreign investors to hold local-currency investments in government securities for at least a year, starting July 1, Governor Lamido Sanusi said June 23. “Positive interest rates” will contribute to the gain, he said.

Authorized dealers can sell a maximum of $250,000 to foreign-exchange bureau operators a week, the Abuja-based central bank said in a statement June 24. Operators are only allowed to purchase from one authorized dealer a week, it said.

The naira may strengthen to 153 against the dollar by year- end and 150 per dollar by the end of 2012, Morgan Stanley economists Andrea Masia and Michael Kafe said yesterday. “A surplus inflow of funds should be supportive of naira to appreciate over the next two years,” the Johannesburg-based analysts said.

--Editors: Ana Monteiro, Linda Shen

To contact the reporter on this story: Chris Kay in London at

To contact the editor responsible for this story: Gavin Serkin at

Video Game Avenger
blog comments powered by Disqus