Bloomberg News

Nigeria’s Naira Advances From Month Low on Stronger Oil Prices

March 13, 2012

The naira appreciated from near a month low on speculation it will be supported as stronger oil prices outweighed an increase in gasoline import orders.

The currency of Africa’s biggest oil producer strengthened 0.3 percent to 157.85 per dollar on the interbank market as of 5:48 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg. The naira weakened 0.6 percent yesterday to the lowest closing level since Feb. 15.

Oil in New York rebounded from the lowest level in almost a week as investors bet fuel demand may increase amid signs the U.S. and Chinese economies are strengthening. Nigerian benchmark Bonny Light crude has jumped 16 percent this year.

“We do not expect a sharp depreciation amid strong oil revenue inflows,” Barclays Plc-owned Absa Capital strategists, led by Ridle Markus in Johannesburg, wrote in a note to clients today. “Nigerian oil production has been strong while higher prices are also a boon.”

Nigeria, which imports 70 percent of its fuel due to a lack of refining capacity, approved a tender for 3.57 million metric tons of gasoline imports into the country for the second quarter, the Petroleum Products Pricing Regulatory Agency said yesterday. Forty-two fuel retailers including the stated-owned Nigerian National Petroleum Corp., Conoil Plc (CONOIL) and Oando Plc (OANDO) were issued permits.

The economy of Nigeria, sub-Saharan Africa’s second largest, expanded 7.68 percent in the fourth quarter of 2011 from a year earlier, led by the telecommunications industry, the National Bureau of Statistics based in the capital Abuja said today. Growth accelerated from 7.4 percent in the previous three months and compared with 8.6 percent in the same period in 2010.

Yields Rise

Borrowing costs on the West African nation’s domestic bonds due 2015 increased 11 basis points, or 0.11 percentage point, to 15.84 percent, according to prices on the Financial Markets Dealers Association website. Yields on Nigeria’s $500 million of dollar bonds due 2021 fell eight basis points, or 0.08 percent, to 5.632 in London, according to data compiled by Bloomberg.

Ghana’s cedi depreciated 0.4 percent to 1.729 per dollar in Accra, the capital.

To contact the reporter on this story: Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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