Bloomberg News

Naira Rises to Month-High as State Oil Company Sells Dollars

December 07, 2012

Nigeria’s naira advanced to its highest in a month after state-owned Nigerian National Petroleum Corp. was said to have sold dollars to lenders, boosting supply.

The currency of Africa’s biggest oil producer advanced 0.2 percent to 156.975 a dollar, the highest since Nov. 6, as of 4:30 p.m. in Lagos, the commercial capital. The currency gained 0.1 percent this week, its third weekly gain in five, according to data compiled by Bloomberg. The naira has risen 3.3 percent this year, the second-best performance among African currencies tracked by Bloomberg.

Nigerian National Petroleum Corp. or NNPC periodically sells dollars to lenders to meet local spending needs. The oil companies pumping the country’s oil are the second-biggest source of foreign currency after the Central Bank of Nigeria, which sells at twice-weekly auctions to support the local currency.

The NNPC sold dollars to banks today, Augustus Nwachukwu, analyst at Lagos-based Stanbic IBTC Holdings Co., said by phone. The sale was speculated to be “between $400 million and $450 million.”

Fidelis Pepple, NNPC spokesman, had no immediate comment when contacted on the phone by Bloomberg.

The central bank held its benchmark interest rate at a record high 12 percent this year to ease inflation pressures and stabilize the naira. Inflation, which accelerated for the first time in four months to 11.7 percent in October, remains above the bank’s target of less than 10 percent.

The yield on 16.39 percent naira debt due January 2022 fell nine basis points to 12.01 percent, according to yesterday’s prices on the website of the Lagos-based Financial Markets Dealers Association website. Borrowing costs on the nation’s $500 million of Eurobonds due January 2021 fell two basis points to 4.184 percent.

Ghana’s cedi appreciated less than 0.1 percent at 1.8911 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: Vernon Wessels at vwessels@bloomberg.net


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