Bloomberg News

Nigerian Naira Heads for First Weekly Gain in 8 on Demand Curbs

October 28, 2011

Oct. 28 (Bloomberg) -- The Nigerian naira headed for the first weekly gain against the dollar in two months after the central bank introduced measures to ease foreign-currency demand pressures.

The currency of Africa’s biggest oil producer has strengthened 1.27 percent since Oct. 24 to 160 naira per dollar, gaining 0.4 percent at 11:25 a.m. from yesterday’s close in interbank trading in Lagos, according to data compiled by Bloomberg. A close at this price will be its first weekly gain since Sept. 9.

The central bank raised interest rates and excluded companies that export crude oil, or want to repatriate dividends and capital, from its twice-weekly foreign-currency auctions in an attempt to reduce demand after the naira fell to a record 166.8 per dollar on Oct. 10. The regulator said last week it plans to sell or buy dollars in the interbank market to further stabilize the exchange rate.

“The central bank has made direct dollar sales to some banks, which raised supply and reduced pressure on naira,” Usman Onoja, chief executive of Lagos-based Lovonus Trust and Investment Ltd., which trades currencies, said today by phone. “The central bank is expected to raise its supply further.”

--Editors: Dulue Mbachu, Linda Shen.

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


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