Bloomberg News

Naira Rises 2nd Day as Bank Sells Most Dollars in 8 Months

March 22, 2013

Nigeria’s naira climbed for a second day after the central bank sold the most dollars at its twice-weekly sales in eight months.

The currency of Africa’s second-biggest economy gained 0.2 percent to 158.25 per dollar by 3:08 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg, bringing the weekly rise to the same level.

The Central Bank of Nigeria sold $580 million to lenders this week at two regular foreign-currency auctions, the most since the week through July 4, 2012. The Abuja-based regulator uses the sales to stabilize the naira as the cost of importing refined fuel, which accounts for 70 percent of the local gasoline market, boosts dollar demand and puts pressure on the currency. The bank cut total sales by 6 percent last week to $360 million.

“On the back of the increased foreign-exchange sales from the bank, the naira stabilized this week,” Ridle Markus and Dumisani Ngwenya, Africa strategists at Absa Capital in Johannesburg, wrote in a note to clients today. “The increased supply was amid visible pressures on the naira.”

The central bank can sell more dollars to ensure the stability of the naira, Governor Lamido Sanusi said after the bank’s Monetary Policy Committee meeting on March 19, where it kept its benchmark interest rate at a record high of 12 percent for a ninth consecutive meeting.

The yield on the country’s 16.39 percent domestic bonds due January 2022 were unchanged at 11.24 percent in the secondary market, according to yesterday’s data compiled on the Financial Markets Dealers Association website. Yields on the $500 million of Eurobonds due January 2021 declined 6.5 basis points, or 0.07 percentage point, to 4.239 percent today.

Ghana’s cedi was little changed at 1.94 per 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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