Bloomberg News

Nigeria’s Naira Snaps Three-Day Decline on Inflows, Reserves

September 05, 2012

The naira snapped three days of declines on inflows and on bets the central bank will support the currency as reserves increased.

The currency of Africa’s biggest oil producer climbed 0.1 percent to 158.38 per dollar as of 3:35 p.m. in Lagos, the commercial capital. The naira has climbed 2.5 percent this year, the second-best performer in Africa, according to data compiled by Bloomberg.

The Central Bank of Nigeria will sell 142.9 billion naira ($903 million) of 91-day, 182-day and 364-day treasury bills at an auction today, it said on Aug. 29. Nigeria’s foreign-currency reserves have risen 18 percent this year to $38.9 billion, according to Aug. 31 data compiled by the central bank. The regulator sold $200 million at a foreign currency auction today, unchanged from the previous sale on Sept. 3, it said in an e- mailed statement.

“The naira is strengthened by foreign investments into treasury bills and the expectation that the central bank will support the currency against the backdrop of rising foreign exchange reserves,” Edgar Ebinum, analyst at Lagos-based Cowry Asset Management Ltd., said in a telephone interview today.

The yield on Nigeria’s 7 percent domestic bonds due 2019 rose 44 basis points to 13.96 percent, according to Sept. 4 data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due 2021 fell three basis points to 4.9 percent today.

Ghana’s cedi rose 0.2 percent to 1.9315 a 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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