Bloomberg News

Naira Appreciates on Lower Dollar Demand Before Bank Auction

June 27, 2012

Nigeria’s naira appreciated on lower demand for the dollar as investors awaited the central bank’s auction and as oil companies were said to sell the U.S. currency.

The currency of Africa’s largest biggest oil producer appreciated 0.2 percent to 162.4000 naira per dollar in interbank trading as of 1:48 p.m. in Lagos, according to data compiled by Bloomberg.

The Central Bank of Nigeria supplies dollars to the market on Mondays and Wednesdays to support the naira. The oil industry, which sells dollars to lenders around the end of each month, is the second major supplier of the U.S. currency. The central bank sold $350 million at a foreign-currency auction on June 25, matching the amount sold on June 20, at 155.91 naira per dollar, the Abuja-based bank said.

“Many traders are waiting for the central bank’s supply and sales expected from Exxon Mobil Corp. (XOM:US) and Chevron Corp. (CVX:US) to enable them to make transactions at better rates,” Abubakar Muhammed, chief executive of Lagos-based Forward Marketing Bureau de Change Ltd., said by phone today.

Nigeria’s inflation rate fell to 12.7 percent in May from 12.9 percent in April, the National Bureau of Statistics said June 19, staying above the central bank’s target and adding to expectations interest rates will remain unchanged at a record high of 12 percent.

The yield on Nigeria’s domestic 15.1 percent bonds due 2017 rose to a record, gaining eighteen basis points to 15.89 percent, according to the June 26 data on the Financial Markets Dealers Association website. The Debt Management Office will offer as much as 30 billion naira ($184 million) of the five- year notes at an auction today.

Yields on the nation’s $500 million of Eurobonds due 2021 fell nine basis points to 5.596 percent today.

Ghana’s cedi climbed 0.2 percent to 1.934 per dollar in Accra, the capital.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net


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Companies Mentioned

  • XOM
    (Exxon Mobil Corp)
    • $95.78 USD
    • -1.25
    • -1.31%
  • CVX
    (Chevron Corp)
    • $122.66 USD
    • -1.17
    • -0.95%
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