The naira declined for a fifth day, the longest losing streak since May, as companies bought dollars to pay for imports and analysts speculated that the state-oil company will limit supply of the U.S. currency.
The naira slid 0.1 percent to 161.55 per dollar at 2:31 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg. The naira has risen 0.5 percent this year.
While Nigeria is Africa’s biggest oil producer, it relies on imports to meet more than 70 percent of domestic fuel needs because of a lack of refining capacity, according to the Petroleum Ministry. The West African nation approved importing 3.135 million metric tons of gasoline in the third quarter, the Petroleum Products Pricing and Regulatory Agency said in June.
Importers have “lapped up” any dollars offered, Celeste Fauconnier and Nema Ramkhelawan-Bhana, Africa analysts at Rand Merchant Bank in Johannesburg, wrote in a report today. “Dollar demand could begin to outpace supply should Nigerian National Petroleum Corp. fail to come to market.”
The oil industry acts as a supplier of dollars as companies sell to lenders to meet local expenses.
Nigeria sold $250 million at a foreign-currency auction today, with lenders buying the entire amount on sale, the Abuja- based Central Bank of Nigeria said in an e-mailed statement. Dollars were sold from 155.86 naira to 155.95 naira each. The marginal rate, which is also used as the prevailing exchange rate, was 155.86, unchanged from the previous sale on Aug. 1.
The yield on Nigeria’s seven-year domestic bonds due June 2019 fell 16 basis points to 16.31 percent, according to Aug. 3 data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due 2021 rose two basis point to 5.30 percent today.
Ghana’s cedi slid 0.2 percent to 1.9585 per dollar in Accra, the capital.
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