The naira weakened for the first time in three days after the central bank reduced its supply of dollars just as oil companies are increasing their demand.
The currency of Africa’s biggest oil producer depreciated as much as 0.6 percent before paring its loss to less than 0.1 percent at 157.675 per dollar by 3:45 p.m. in Lagos, according to data compiled by Bloomberg.
Nigeria sold $128.75 million at a foreign-currency auction yesterday, the lowest since Feb. 22, according to the Abuja- based central bank. The central bank banned in October oil companies that export crude from buying dollars at its auctions, leaving them dependent on the interbank market and other sources. A majority of crude exporters are also importers of oil.
“Oil companies are unable to source dollars for second- quarter imports at the official auction due to the ban, a development that has increased demand at the interbank market,” Sewa Wusu, currency analyst at Lagos-based Sterling Capital Ltd., said by phone. “Higher dollar supply from the official and autonomous sources is needed to outweigh demand for second- quarter imports by oil importers,” Wusu said.
Nigeria approved a tender to import 3.57 million metric tons of gasoline for the second quarter on March 12. Oil imports are a major source of pressure on the naira, according to the central bank.
The regulator left its key interest rate unchanged at 12 percent for a third consecutive meeting on March 20 to curb inflation and stabilize the local currency. Inflation (NGCPIYOY) declined to 11.9 percent in February from 12.6 percent a month earlier, the National Bureau of Statistics said March 19.
The yield on Nigeria’s $500 million of dollar bonds due 2021 fell 2 basis points to 5.377 percent.
Ghana’s cedi weakened 0.2 percent to 1.779 per dollar in Accra, its lowest level since at least June 1993.
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