Bloomberg News

Nigeria Naira Drops 2nd Day as Oil Companies Halt Dollar Sales

November 12, 2012

Nigeria’s naira fell for a second day as oil companies were said to refrain from selling dollars in the market.

The currency of Africa’s biggest oil producer slipped 0.1 percent to 157.6 a dollar by 12:18 p.m. in Lagos, the commercial capital. The naira has increased 3 percent this year, the second-best performer in Africa, according to data compiled by Bloomberg.

Expected dollar sales from the Nigerian National Petroleum Corp. “haven’t come through,” Jide Solanke, an analyst at First Securities Discount House Ltd., said by phone from Lagos today. “The central bank hasn’t been selling much.”

Oil-producing companies, which sell dollars to meet domestic expenses, are the second-biggest source of foreign currency after the central bank, which sells dollars on Mondays and Wednesdays to keep the naira within a 3 percent band around 155 per dollar.

The Abuja-based Central Bank of Nigeria sold $79.9 million at its two scheduled auctions last week, the lowest since December 2009, according to data on the bank’s website.

The yield on the 16.39 percent naira debt due January 2022 fell one basis point to 12.65 percent, according to Nov. 9 prices compiled by the Lagos-based Financial Markets Dealers Association. Borrowing costs on the nation’s $500 million of Eurobonds due January 2021 retreated three basis points to 4.4 percent today.

Ghana’s cedi was little changed at 1.8795 a dollar in Accra, the capital.

To contact the reporter on this story: Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net


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