Nigeria’s naira fell for a second session against the dollar on speculation it will face more declines due to foreign-currency demand to fund imports.
Nigeria’s central bank on Nov. 21 lowered the midpoint of its exchange rate band at its twice-weekly auctions to 155 naira per dollar from 150 naira, amid pressure from rising imports and concerns of weakening oil prices, the source of more than 95 percent of Nigeria’s foreign-exchange income.
Demand fueled by imports “is relatively constant while the supply of foreign exchange clearly hinges on oil and gas export revenues,” FBN Capital strategists, led by London-based Gregory Kronsten, wrote in a report today. “Business has been accumulating foreign exchange positions, it seems, in the belief that further depreciation lies ahead.”
Ghana’s cedi advanced for the first session in four, up 0.1 percent to 1.6413 per dollar as of 10:33 a.m. in Accra, according to data compiled by Bloomberg.
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