Bloomberg News

Naira Pares Biggest Weekly Drop in Six

March 01, 2013

Nigeria’s naira appreciated, paring its biggest five-day decline in six weeks, as the central bank sold the most dollars this year at an auction and oil companies also sold the U.S. currency.

The currency of Africa’s biggest oil producer gained 0.2 percent to 158.10 per dollar as of 4:10 p.m. in Lagos, the commercial capital, giving a 0.4 percent retreat this week, according to data compiled by Bloomberg.

The Central Bank of Nigeria sold $200 million at an auction on Feb. 27, the most this year, bringing sales this week to $350 million, the highest in eight. Oil-producing companies, which sell dollars to lenders around the month-end to meet local spending needs, are the second-biggest source of foreign currency after the central bank.

“The central bank’s sale this week was an intervention to boost dollar supply and ease pressure on the naira,” Abubakar Mohammed, chief executive of Lagos-based Forward Marketing Bureau de Change Ltd., said by phone today. “Sales by oil companies complemented official supply.”

The central bank stepped in this week by increasing foreign-exchange sales as capital inflows from outside the country reduced amid a more risk-averse global environment in February, Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd., Africa’s largest bank by assets, said yesterday.

The regulator held the benchmark interest rate at a record high 12 percent for an eighth straight time on Jan. 21 to control inflation and stabilize the naira. The nation’s inflation rate fell to 9 percent in January from 12 percent in December, the statistics bureau said Feb. 18.

The yield on the country’s 16.39 percent domestic bonds due January 2022 fell one basis point to 10.60 percent, according to yesterday’s data compiled on the Financial Markets Dealers Association website.

Yields on Nigeria’s $500 million of Eurobonds due January 2021 fell eight basis points to 4.334 percent today.

Ghana’s cedi was unchanged at 1.9175 per 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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