Nigeria’s naira strengthened to its highest in more than five weeks after the central bank sold dollars to lenders.
The currency of Africa’s biggest oil producer appreciated 0.1 percent to 157.36 per dollar as of 4:02 p.m. on the interbank market in Lagos, the commercial capital, its strongest since March 9, according to data compiled by Bloomberg.
The Central Bank of Nigeria sold $150 million at a foreign- currency auction today, with lenders buying the entire amount on sale, the Abuja-based bank said in an e-mailed statement. The marginal rate, which is also used as the prevailing exchange rate, strengthened 0.1 percent to 155.69 naira, it said. The central bank which sells foreign currency at auctions on Mondays and Wednesdays to stabilize the naira is the major supplier of foreign exchange, followed by oil companies.
“Dollar sales by the central bank augmented oil industry supply to support the naira,” Sewa Wusu, a currency analyst at lagos-based Sterling Capital Ltd., said by phone today.
The bank only held one auction for the dollar last week as April 9 was a public holiday.
Nigeria sold 183.7 billion naira ($1.2 billion) of Treasury bills on April 11 and 80 billion naira of bills at its open- market operations, the central bank said April 12.
“The naira remains well supported, owing to consistent dollar inflows coupled with regular offerings by major oil firms on the interbank market,” Celeste Fauconnier and Nema Ramkhelawan-Bhana, Africa strategists at Rand Merchant Bank in Johannesburg, wrote in a report today.
Nigeria’s foreign-exchange reserves rose 9.5 percent this year to $36.5 billion as of April 12, according to data compiled by the central bank.
Borrowing costs on domestic 2019 bonds declined 5 basis points, or 0.3 percent, to 15.24 percent, according to April 13 prices on the Financial Markets Dealers Association website. Yields on the West African nation’s $500 million of dollar bonds were unchanged at 5.509 percent in London.
Ghana’s cedi depreciated 0.3 percent to 1.8045 per dollar as of 4:01 p.m. in Accra, the lowest on record since at least June 1993.
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