Bloomberg News

Naira Weakens on Dollar Shortage After Central Bank Auction Ends

December 29, 2011

     Dec. 29 (Bloomberg) -- Nigeria’s naira weakened against the dollar on a shortage of U.S. currency after the central bank closed its twice-weekly foreign-currency auctions for the year.      The currency of Africa’s biggest oil producer declined 0.3 percent to 163.45 per dollar as of 12:25 p.m. in Lagos, according to data compiled by Bloomberg.

“There is shortage of dollars relative to demand as there is no official foreign-currency auction this week,” Tunde Ladipo, chief executive of Lagos-based Valuechain Investment Ltd. said by phone today. “Pressure is however eased on the naira from intermittent dollar sales by the oil companies.”      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 in January, Muhammed Abdullahi, a spokesman for the central bank in Abuja, said on Dec. 21.      Ghana’s cedi was weakest for about two weeks as it declined 0.3 percent to 1.6425 per dollar as of 12:25 p.m. in Accra, the nation’s capital.

--Editors: James Kraus, Alan Purkiss

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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