Naira Falls Most in Month as Bank Sells Least Dollars in 3 Years

Nigeria’s naira weakened the most in a month after the central bank sold the lowest amount of dollars at an auction in more than three years.

The currency of Africa’s biggest crude producer retreated 0.4 percent to 157.4 a dollar by 4:30 p.m. in Lagos, the biggest decline since Oct. 5. That pares gains this year to 3.1 percent, the second-best performance in Africa, according to data compiled by Bloomberg.

The Central Bank of Nigeria sold $29.88 million at an auction today, the lowest amount since October 2009, according to data on the Abuja-based bank’s website.

“The supply was not enough for the interbank market where lenders trade the foreign currency to meet the need of their customers,” Tunde Ladipo, chief executive officer of Lagos- based Valuechain Investment Ltd., said by phone.

The central bank, led by Governor Lamido Sanusi, has left the benchmark interest rate unchanged at a record 12 percent this year, increased lenders’ reserve requirements and limited access to money auctions to stop dealers from buying foreign currency using naira purchased from the bank at a discount.

“The central bank limits access to its auction and therefore to official reserves,” Gregory Kronsten, head of economic research at FBN Capital Ltd. in London, wrote in an e- mailed note to clients today.

The nation’s foreign-exchange reserves have increased 29 percent this year to $42.67 billion as of Oct. 31, according to data on the central bank’s website.

The yield on the nation’s 16.39 percent naira debt due January 2022 was unchanged at 12.89 percent, according to today’s prices compiled by the Lagos-based Financial Markets Dealers Association. The yield on the country’s $500 million of Eurobonds due January 2021 was down 4 basis points at 4.424 percent today.

Ghana’s cedi appreciated 0.4 percent to 1.8819 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: Dulue Mbachu at dmbachu@bloomberg.net

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