The naira depreciated to the lowest in more than two weeks against the dollar on accumulated demand for the U.S. currency following the central bank’s decision to reduce sales to foreign-exchange bureaus.
The currency of Africa’s biggest oil producer retreated 0.2 percent to 157.905 per dollar as of 12.15 p.m. in Lagos, the commercial capital, its weakest since March 13, according to data compiled by Bloomberg.
The Central Bank of Nigeria on March 18 cut dollar sales to each bureau by 25 percent to $75,000 dollars per week, without giving a reason. The regulator raised the weekly sales to $100,000 in August in an attempt to reduce demand pressure and stabilize the naira.
“There is demand pressure at the interbank market from bureau de change after the central bank cut sales to operators,” Abubakar Muhammed, chief executive of Lagos-based Forward Marketing Communications Bureau De Change, said in a phone interview. “Pressure from the accumulated demand is exposing the naira to depreciation.”
Nigeria sold $150 million at a foreign-currency auction yesterday, with the marginal rate gaining by less than 0.1 percent to 156.01 per dollar, the central bank said.
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.
Nigeria sold domestic bonds due 2019 at a yield of 15.30 percent yesterday, 86 basis points lower than the 16.16 percent at a previous auction on Feb. 29, the Abuja-based debt management agency said today. The yield on the country’s $500 million of dollar bonds due 2021 fell five basis points to 5.315 percent.
Ghana’s cedi appreciated 0.5 percent to 1.7717 per dollar in Accra, the capital.