Nov. 25 (Bloomberg) -- Nigeria’s naira headed for a weakly retreat, though it pared an earlier fall against the dollar, after the central bank lowered its target range.
The currency of Africa’s biggest oil producer rose less than 0.1 percent to 159.375 per dollar, as of 2:55 p.m. on the interbank market in Lagos, taking its weekly retreat to 0.5 percent, according to data compiled by Bloomberg. The Ghanaian cedi tumbled 0.6 percent to 1.643 against the dollar, the lowest on record, as of 1:56 p.m. in Accra.
Nigeria’s central bank on Nov. 21 lowered the midpoint of its exchange rate band at its twice-weekly auctions to 155 naira per dollar from 150 naira, amid pressure from rising imports and concerns of weakening oil prices, the source of more than 95 percent of Nigeria’s foreign-exchange income. At a currency auction yesterday, Nigeria sold $250 million, compared with $411.6 million demanded by lenders, with the naira down by 0.6 percent to 156.21 per dollar, its weakest since Oct. 12.
“The market and stakeholders are trying to adjust, to digest the information that the band was going to be moved from 150 to 155,” Adedayo Idowu, an analyst at Vetiva Capital Management Ltd. in Lagos, said by phone today. “There will be some kind of convergence” between the official auction rates and the freely moving interbank rates, Idowu said.
The cedi, down 1.7 percent in the last five days, headed for its fifth consecutive weekly decline, according to data compiled by Bloomberg.
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