The naira depreciated the most in seven weeks on higher demand for dollars from foreign exchange bureaus and importers.
The currency of Africa’s largest oil producer declined 0.8 percent to 160.95 per dollar as of 1:37 p.m. in Lagos, the commercial capital, its biggest decline on a closing basis since June 7, according to data compiled by Bloomberg.
“There is accumulated demand by exchange bureaus, which are channelled at interbank market, besides demand from other importers, both factors are weakening the naira,” Abubakar Muhammed, chief executive of Lagos-based Forward Marketing Bureau de Change Ltd., said by phone today. Fuel imports have been a source of pressure on the naira, according to the Central Bank of Nigeria.
The central bank said on July 9 it cut the amount of weekly dollar sales to each bureau de change to $50,000 from $75,000 previously. The Abuja-based bank said July 24 it reduced the amount of foreign exchange banks can hold as a percentage of their shareholders’ funds to 1 percent from 3 percent and kept its interest rate unchanged at 12 percent. The amount of cash as a percentage of deposits that commercial banks must hold with the central bank was increased to 12 percent from 8 percent, Governor Lamido Sanusi said.
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 country’s foreign-currency reserves have fallen by $1.3 billion since the end of May to $36.4 billion, according to July 24 data compiled by the central bank.
The yield on Nigeria’s seven-year domestic bonds due June 2019 rose 36 basis points to 16.49 percent, according to July 25 data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due 2021 declined by eight basis points to 5.397 percent today.
Ghana’s cedi depreciated 0.1 percent to 1.9575 per dollar in Accra, the capital, the lowest since at least 1993.
To contact the reporter on this story: Emele Onu in Lagos at firstname.lastname@example.org
To contact the editor responsible for this story: Dulue Mbachu at email@example.com