Bloomberg News

Nigeria Naira Falls to 3-Month Low; Bank Cuts Dollar Supply

September 12, 2011

(Updates with comment from analyst in fifth paragraph.)

Sept. 12 (Bloomberg) -- Nigeria’s naira slipped to its weakest in almost three months against the dollar at a currency auction after the central bank cut dollar supply to the lowest level in more than three weeks.

The currency of sub-Saharan Africa’s biggest oil producer declined 0.1 percent to 153.27 naira per dollar at the auction, its weakest level since an auction on June 22. It retreated 0.2 percent to 155.40 naira per dollar in interbank trading by 3:29 p.m. in Lagos, the lowest since Sept. 8, according to data compiled by Bloomberg.

The central bank sold $350 million, compared with $362.7 million demanded by lenders, the 18th straight auction it failed meet demand, the Abuja-based central bank said in an e-mailed statement.

Africa’s biggest oil producer has used foreign-currency reserves to keep naira within a 3 percentage-point band above or below 150 naira per dollar at its bi-weekly auctions to help check inflation.

“The naira reacted to the reduction in dollar sales by central bank, which fell short of ‘moderate’ demand by dealers,” Usman Onoja, chief executive officer of Lagos-based Lovonus Trust and Investment Ltd., which trades in currencies, said in a phone interview from Lagos.

The central bank Governor Lamido Sanusi, said on Sept. 7 the bank doesn’t have to meet demand at every currency auction as long as the naira exchanges in the band.

--Editors: Ana Monteiro, Gavin Serkin

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

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


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