Bloomberg News

Nigeria Naira Falls for Third Day on Accumulated Dollar Demand

November 30, 2011

Nov. 29 (Bloomberg) -- Nigeria’s naira depreciated for a third day against the dollar on accumulated demand after the central bank failed to meet lenders’ requests at successive foreign-currency auctions.

The currency of Africa’s biggest oil producer retreated 0.7 percent, before paring the loss to 0.4 percent at 160.83 per dollar in interbank trading at 3:58 p.m. in Lagos. Nigeria sold $200 million at an auction yesterday, less than the $315.6 million sought by lenders, failing to meet demand for the third straight auction.

“The central bank has underfunded the market at the official currency auction, thereby raising dollar demand at the interbank,” Tunde Ladipo, chief executive of Lagos-based Valuechain Investment Ltd., which trades in currencies, said today by phone. “There is high dollar demand for imports toward the year-end and unless central bank intervenes, the naira will remain under pressure for the rest of today.”

The 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 concern about weakening oil prices, the source of more than 95 percent of Nigeria’s foreign-exchange income.

Ghana’s cedi fell for a fifth session, declining 0.4 percent to 1.65 per dollar, at 3:58 p.m. in Accra, the lowest on record, according to data compiled by Bloomberg.

--Editors: Peter Branton, Emily Bowers

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

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net


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