Bloomberg News

Naira Weakens for First Day in Three on Rising Dollar Demand

January 26, 2012

Jan. 26 (Bloomberg) -- Nigeria’s naira weakened for the first time in three days against the dollar on mounting demand for foreign currency as businesses begin import orders for the year.

The currency of Africa’s biggest oil producer declined 0.4 percent to 160.60 per dollar on the interbank market as of 4:50 p.m. in Lagos, the commercial capital, from yesterday’s close in New York, according to data compiled by Bloomberg.

“Demand piled up from importers that could not get dollars during the workers’ strike and those that had planned their importation at month-end, which is among the usual busy times for the year,” Tunde Ladipo, chief executive of Lagos-based Valuechain Investment Ltd., said by phone. “Dollars are going into the importation of industrial goods and raw materials, refined petroleum and even consumables.”

Nigeria’s central bank offers foreign currency to lenders at twice-weekly auctions, where it tries to keep the exchange rate around a midpoint of 155 naira to a dollar in order to stabilize prices. The bank also sells dollars directly to lenders through the interbank market, to improve supply and reduce pressure on the naira. The central bank sold $604.5 million dollars to lenders this week through its foreign currency auction and forward sales.

A national strike against higher fuel prices, which shut banks, businesses and the ports, ended on Jan. 16 after President Goodluck Jonathan limited the increase, enabling the return of normal economic activities and increasing demand for foreign currency by importers, Mohammed said.

Ghana’s cedi rose for the second day, climbing less than 0.1 percent to 1.6998 per dollar, as of 4:50 p.m. in Accra, the capital, according to data compiled by Bloomberg

--Editors: Peter Branton, Stephen Kirkland

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

To contact the editor responsible for this story: Peter Branton at pbranton@bloomberg.net


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