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The naira fell for a third day, headed for its second weekly decline, on higher dollar demand for gasoline imports and as oil, the country’s key export, retreated.
The currency of Africa’s largest oil producer weakened 0.1 percent to 161.65 per dollar as of 11 a.m. in Lagos, the commercial capital, heading for a weekly fall of 0.3 percent, according to data compiled by Bloomberg.
Nigeria approved a tender on June 27 to import 3.135 million metric tons of gasoline in the third quarter, the Petroleum Products Pricing and Regulatory Agency said. Oil fell from a nine-week high in New York, paring a second weekly advance, as worse-than-expected economic data added to signs seasonal crude demand is weakening.
The “naira has been under pressure this week from oil importers that were granted official permits last week,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., which trades currencies, said by phone today. “The downturn in oil prices, reserves and rising inflation remain a concern.”
Nigeria relies on imports to meet 70 percent of its fuel needs because of inadequate refining capacity, Petroleum Minister Diezani Alison-Madueke said in November. The central bank sold $500 million at its foreign-currency auctions this week, after selling $343.5 million the previous week, according to data on the bank’s website.
The country’s foreign-currency reserves have fallen by $1.3 billion since the end of May to $36.379 billion, according to July 18 data compiled by the Abuja-based central bank. Nigerian benchmark Bonny Light crude, declined 0.6 percent today and traded at $108.05 a barrel from $128.47 on March 13.
The central bank held the benchmark interest rate at 12 percent this year to curb the naira’s decline and combat inflation, after raising it 5.75 percentage points last year. Inflation accelerated to 12.9 percent in June, from 12.7 percent in May, the Abuja-based National Bureau of Statistics said July 18.
The yield on Nigeria’s 7-year domestic bonds due June 2019 rose 10 basis points to 16.36 percent, according to July 19 data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due 2021 fell eight basis point to 5.427 percent today.
Ghana’s cedi depreciated for a second day by 0.1 percent to 1.9550 per dollar in Accra, the capital.
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