Nigerian Naira Snaps 3-Day Decline as Central Bank Boosts Supply

Nigeria’s naira appreciated, snapping three days of declines, after the central bank sold the highest amount of the currency in eight weeks of auctions.

The currency of Africa’s biggest oil producer gained less than 0.1 percent to 157.805 a dollar by 1:55 p.m. in Lagos, the commercial capital. The naira has strengthened 2.8 percent this year, the second-best performer in Africa, according to data compiled by Bloomberg.

The Central Bank of Nigeria sold $200 million at an auction today, it said in an e-mailed statement. That brings its sale at its two scheduled auctions this week to $350 million, the highest in eight, according to data on its website. The regulator sells dollars on Mondays and Wednesdays to keep the naira within a 3 percent band around 155 a dollar.

“The central bank supply strengthened the naira, given limited dollar demand at this time,” Edgar Ebinum, an analyst at Lagos-based Cowry Asset Management Ltd., said by phone from Lagos, the commercial capital.

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 yield on the nation’s 16.39 percent naira debt due January 2022 was unchanged at 12.74 percent, according to yesterday’s prices compiled by the Lagos-based Financial Markets Dealers Association. Borrowing costs on the nation’s $500 million of Eurobonds due January 2021 declined 10 basis points to 4.28 percent today.

Ghana’s cedi declined for the first day in three, sliding 0.1 percent to 1.8788 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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