Bloomberg News

Nigeria’s Naira Falls 1st Day in Three as Banks Increase Demand

March 15, 2012

The naira weakened for the first time in three days as banks increased their demand for dollars after the government issued gasoline import permits for the second quarter.

The currency of Africa’s biggest oil producer depreciated 0.1 percent to 157.85 per dollar on the interbank market as of 4:10 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.

Nigeria approved a tender for 3.57 million metric tons of gasoline imports for the second quarter on March 12. Forty-two fuel retailers including the stated-owned Nigerian National Petroleum Corp., Conoil Plc (CONOIL) and Oando Plc (OANDO) were issued permits, the Petroleum Products Pricing Regulatory Agency said. The West African country imports 70 percent of its fuel due to a lack of refining capacity.

The naira fell as banks demanded dollars following “strong request by petroleum marketing companies placing fuel import orders for the second quarter,” Gregory Kronsten, head of macroeconomic research at FBN Capital Ltd., wrote in a note to clients today. “Another key factor influencing foreign exchange demand is the country’s hearty consumption of imported food products.”

Nigeria’s Senate approved spending of 4.9 trillion naira for this year, based on an oil export price of $72 a barrel, Senate President David Mark said at today’s session in Abuja, the capital. Yield on the country’s $500 million of dollar bonds due 2021 appreciated by 1 basis point, or 0.01 percentage point, to 5.617. Borrowing costs of domestic bonds due 2015 increased 1 basis point to 15.85 percent, according to prices on the Financial Markets Dealers Association website.

Ghana’s cedi depreciated to the lowest in about two months by 0.2 percent to 1.7335 per dollar in Accra, the capital, its weakest since Jan. 19.

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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