The naira strengthened the first time in three days against the dollar on bets the central bank will keep the local currency stable after foreign-exchange reserves increased.
The currency of sub-Saharan Africa’s second biggest economy appreciated 0.2 percent to 157.05 per dollar as of 1:24 p.m. in Lagos, the commercial capital. The naira has appreciated 3.3 percent against the dollar this year.
Foreign-exchange reserves in Africa’s biggest oil producer rose to 36.22 billion as at April 20, the Central Bank of Nigeria published in its website today. The reserves have jumped 10 percent this year, according to data compiled by the bank. Oil has traded more than $40 per barrel above the $72 benchmark contained in the 2012 budget.
“The market might be reassured by the government” that the various components of the reserves are “presently in accumulation mode,” Gregory Kronsten, the London-based head of macroeconomic research at FBN Capital Ltd., wrote in an e-mailed note to clients today. “Official reserves, which include the Excess Crude Account, are equivalent to 4.7 months of import cover for goods and services at 2011 levels according to our estimates.”
The central bank kept its benchmark interest rate unchanged at a record high of 12 percent for a third meeting on March 20. The inflation rate declined to 11.9 percent in February from 12.6 percent a month earlier, according to the National Bureau of Statistics.
The yield on Nigeria’s domestic bonds due 2015 rose six basis points to 15.20 percent, according to the April 23 data on the Financial Markets Dealers Association website.
Ghana’s cedi depreciated 1.2 percent to 1.8525 per dollar in Accra, the weakest since at least June 1993.
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