Oct. 5 (Bloomberg) -- Nigeria’s naira depreciated against the dollar and headed for the weakest closing level on record after the government outlined plans to adopt a weaker exchange rate in calculating its budget for next year.
The currency of Africa’s biggest oil producer retreated 0.4 percent to 160.1 per dollar in the interbank market by 11:29 a.m. in Lagos, the commercial capital. A close at this level would be the weakest since at least 1994, according to data compiled by Bloomberg.
Nigeria plans to raise spending by 7 percent to 4.8 trillion naira ($30 billion) in 2012 in its budget, increasing funding for capital projects, according to a three-year plan sent to parliament in Abuja yesterday by the Budget Office. Africa’s top oil producer will estimate its revenue using a crude-oil price of $75 a barrel and an exchange rate of 153 naira per dollar, weaker than the current 150 naira, according to the document.
The central bank has been using foreign-currency reserves to keep the naira within a 3 percentage-point band above or below 150 per dollar at its twice-weekly auctions. It broke that band on Sept. 26, reaching 155.02 naira per dollar.
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