Bloomberg News

Naira Strengthens Most in a Week on Oil Company’s Dollar Sales

December 28, 2011

Dec. 28 (Bloomberg) -- The naira appreciated the most in a week against the dollar as a major oil company sold the U.S. currency.

The currency of Africa’s biggest oil producer strengthened as much as 1.7 percent, the biggest intraday gain since Dec. 20, before paring its gain to 1.1 percent at 163.15 as of 1:42 p.m. in Lagos, the capital.

“The appreciation at the inter-bank market was due to dollar sales by a major oil company,” analysts at Lagos-based Diamond Bank said in an e-mailed note today. “Dealers expect the naira to gain further as dollar liquidity improves.”

The central bank on Nov. 21 lowered the midpoint of its exchange-rate band at the auctions to 155 naira per dollar from 150 naira as rising imports and weakening oil prices increased pressure on the currency. Sub-Saharan Africa’s second-biggest economy depends on oil exports for more than 95 percent of foreign income, according to the Finance Ministry.

Nigeria closed its foreign-currency auctions for the year on Dec. 21 and will reopen them in January, Muhammed Abdullahi, a spokesman for the central bank in Abuja, said Dec. 21.

Ghana’s cedi was unchanged at 1.6395 per dollar as of 1.20 p.m. in Accra, the nation’s capital.

--Editors: Ash Kumar, Linda Shen

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

To contact the editor responsible for this story: Hilton Shone at hshone@bloomberg.net


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