Bloomberg News

Nigeria’s Naira Weakens for Second Day on Corporate Demand

January 07, 2013

The naira depreciated for a second day as demand for dollars increased after the end of Christmas and New Year festivities.

The currency of Africa’s biggest oil producer weakened 0.2 percent to 157.0375 a dollar by 2:47 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg. The currency lost 0.4 percent last week.

“We expect to see a build-up in demand for foreign exchange as businesses resume” operations, analysts at Lagos- based Cowry Asset Management Ltd., led by Edgar Ebinum, said today in an e-mailed note. “We expect to see pressure on the naira.”

The Central Bank of Nigeria, which sells dollars to lenders to stabilize the naira, resumed twice-weekly foreign-currency auctions today after a break since Dec. 19. It sold $150 million, compared with $300 million disbursed at the previous sale, it said in an e-mailed statement.

Yields on the nation’s $500 million of Eurobonds due January 2021 slid two basis points, or 0.02 percentage point, to 3.906 percent. The rate on 10-year naira debt fell 15 basis points to 11.52 percent, according to Jan. 4 prices compiled on the Financial Markets Dealers Association website.

Central bank policy makers left the benchmark interest rate unchanged at 12 percent last year. Nigeria’s inflation rate rose for a second month in November to 12.3 percent from 11.7 percent, the National Bureau of Statistics said Dec. 17.

Ghana’s cedi weakened 0.1 percent to 1.8975 per dollar in Accra, the capital. It depreciated 16 percent last year, the most since 2008.

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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