Bloomberg News

Naira Falls to Lowest in Week as Oil Industry Demands Dollars

June 28, 2012

Nigeria’s naira depreciated to the lowest in a week as the oil industry demanded dollars for gasoline imports.

The currency of Africa’s biggest oil producer retreated 0.3 percent to 163.05 per dollar as of 3:56 p.m. in Lagos, the weakest on a closing basis since June 15, according to data compiled by Bloomberg. The naira is down 0.5 percent this year, after being Africa’s best-performer against the dollar in the first five months.

Nigeria yesterday approved a tender for the import of 3.135 million metric tons of gasoline in the third quarter, the Petroleum Products Pricing and Regulatory Agency said. Africa’s most populous nation, with more than 160 million inhabitants, relies on imports to meet 70 percent of its fuel needs because of inadequate refining capacity, Petroleum Minister Diezani Alison-Madueke said in November.

“Higher dollar demand is induced by oil companies that got approval to import petroleum,” Wale Abe, chief executive of the Lagos-based Financial Markets Dealers Association, said by telephone today.

The Central Bank of Nigeria sold $700 million at foreign- currency auctions this week, the Abuja-based bank said in an e- mailed statement. The regulator sold $750 million last week, the most since the five days to Oct. 12.

Foreign-currency reserves, which rose 12.1 percent this year, slipped to $36.887 billion, according to the latest data from the central bank dated June 26. The nation’s bonny light crude fell to $91.50 a barrel from $128.47 a barrel on March 13.

Inflation

The 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 18 basis points to 16.07 percent, according to June 27 data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due 2021 fell five basis points to 5.558 percent today.

Ghana’s cedi declined 0.8 percent to 1.9385 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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