Bloomberg News

Naira Advances as Central Bank of Nigeria Said to Sell Dollars

June 06, 2012

Nigeria’s naira rose for the first time in four days, reversing an earlier drop, as the Central Bank of Nigeria was said to sell dollars to lenders outside its scheduled currency auction today.

The currency of Africa’s biggest oil producer jumped 0.7 percent to 161.14 per dollar as of 3:38 p.m. in Lagos, the commercial capital, having earlier declined toward the lowest since Dec. 27.

“The CBN intervened aggressively before today’s session closed and sold dollars to market players,” Samir Gadio, a London-based emerging markets strategist at Standard Bank Group Ltd., said in an e-mailed reply to questions. “Because the CBN had been out of the market for the past two days, it is possible that banks had not positioned for the size of the intervention.”

Nigeria sold $300 million at a currency auction today, taking the total sold at the official window this week to $600 million, the most since February, the central bank said in an e- mailed statement today.

Ugochukwu Okoroafor, a spokesman for the bank, based in the capital, Abuja, didn’t immediately answer a text message sent to his mobile phone after four phone calls were either not answered or engaged.

Nigeria’s economic growth slowed to 6.17 percent in the first quarter, from 7.13 percent a year earlier, the nation’s statistics agency said May 22. Inflation accelerated to 12.9 percent in April after the government partly removed fuel subsidies in January, boosting gasoline costs. The inflation rate is still below the peak of 14.5 percent the central bank forecasts for the third quarter.

Debt Market

The yield on Nigeria’s 10.5 percent domestic bonds due 2014 rose five basis points to 15.57 percent, according to the June 5 data on the Financial Markets Dealers Association website. Borrowing costs on the nation’s $500 million of Eurobonds declined 12 basis points to 5.7457 percent.

“The offshore investor in naira debt securities has been exiting the market, creating pressure on the currency,” Gregory Kronsten and Olubunmi Asaolu, analysts at FBN Capital Ltd., wrote in an e-mailed note today.

Ghana’s cedi was unchanged at 1.9095 per dollar in Accra.

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


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus