Bloomberg News

Nigeria’s Currency Gains as Bank’s Dollar Offer Beats Demand

October 17, 2011

Oct. 17 (Bloomberg) -- Nigeria’s naira strengthened at a foreign-currency auction after the central bank’s supply of dollars exceeded the amount demanded by lenders.

The Central Bank of Nigeria offered $400 million and sold $297 million, outpacing demand for the first time since June 29. The marginal rate, which is used as the prevailing exchange rate, strengthened 0.1 percent to 149.94 per dollar, compared with 150 naira at the previous sale, the Abuja-based bank said in e-mailed statement.

“Anytime the central bank exceeds dollar demand, naira is bound to appreciate,” Usman Onoja, chief executive officer of Lagos-based Lovonus Trust and Investment Ltd., which trades in currencies, said by phone.

A central bank policy restricting some companies from obtaining dollars at the twice-weekly auction added pressure on the naira’s interbank rate, Onoja said. The currency weakened as much as 2.7 percent to 164.8 per dollar, before paring the loss to 162.63 naira as of 5:57 p.m. in Lagos, according to data compiled by Bloomberg.

--Editors: Emily Bowers, Gordon Bell.

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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