Bloomberg News

Naira Heads for First Weekly Drop in 4 as Dollar Sales Decline

April 27, 2012

Nigeria’s naira fell for a second day, heading for its first weekly drop in four, after declining dollar sales from the central bank and energy companies.

The currency of Africa’s biggest oil producer weakened 0.1 percent to 157.6 per dollar on the interbank market as of 11:57 a.m. in Lagos, the commercial capital, poised for a weekly decline of 0.2 percent.

The Central Bank of Nigeria this week sold $230.5 million at its regular foreign-exchange auctions, the least since November. The Abuja-based regulator sells foreign currency on Mondays and Wednesdays to stabilize the naira. The oil industry is the second major supplier of dollars to the market.

The central bank “is not selling as much as it did,” Jide Solanke, an analyst at Lagos-based First Securities Discount House Ltd., said by phone today. Oil companies have also not sold as much as the previous week, he said.

Nigerian inflation accelerated to 12.1 percent in March as food prices increased, the National Bureau of Statistics said April 25, adding to expectations the central bank will keep interest rates at a record high of 12 percent.

Governor Lamido Sanusi said the inflation data were in line with estimates, with the bank still expecting a peak of 14.5 percent in the third quarter and a gradual slowdown to below 10 percent by the end of 2013.

The yield on Nigeria’s $500 million of dollar bonds due 2021 was little changed at 5.451 percent. Borrowing costs of domestic bonds due 2015 declined one basis point to 15.01 percent, according to the April 26 data on the Financial Markets Dealers Association website.

Ghana’s cedi depreciated 0.1 percent to 1.855 per dollar in Accra, the capital.

To contact the reporter on this story: Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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