The naira depreciated for a second day on concern accelerating inflation and declining foreign- exchange reserves are weighing on the currency and as gasoline importers increased dollar demand.
The currency of Africa’s biggest oil producer retreated 0.3 percent to 161.7800 per dollar as of 12:07 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.
The inflation rate rose to 12.9 percent in June from 12.7 percent in May, the Abuja-based National Bureau of Statistics said yesterday. The country’s foreign-currency reserves have fallen by $1.3 billion since the end of May to $36.42 billion, according to July 17 data compiled by the Abuja-based central bank. 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.
“Traders want to increase their dollar position on apprehension rising inflation and decline in reserves will cause further depreciation of the naira,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., which trades currencies, said by phone today. “Besides, dollar demand has risen after some oil importers got their official permits last week.”
The yield on Nigeria’s 7-year domestic bonds due June 2019 rose 14 basis points to 16.26, according to the July 18 data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due 2021 rose less than one basis point to 5.4 percent today.
Ghana’s cedi appreciated 0.5 percent to 1.9420 per dollar in Accra, the capital, gaining for a second day.
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