Naira Weakens on Dollar Sales Suspension, Extends Week’s Drop

Nigeria’s naira declined, extending this week’s retreat, as the Central Bank of Nigeria’s suspension of foreign-exchange auctions curbed demand for the currency.

The currency of Africa’s biggest oil producer slipped 0.3 percent to 156.7 per dollar on the interbank market as of 2:30 p.m. in Lagos, the commercial capital. The currency depreciated 0.4 percent this week.

The central bank, which sells dollars to keep the naira within a 3 percent band around 155 per dollar, ended twice- weekly auctions on Dec. 19. The sales will resume Jan. 7, the Abuja-based bank said Dec. 14.

“The closure of foreign-currency auctions for the second week has reduced dollar supply, relative to demand from companies reopening for business,” Sewa Wusu, currency analyst at Lagos-based Sterling Capital Ltd., said today in a telephone interview.

Yields on 10-year naira debt fell 16 basis points to 11.52 percent, according to yesterday’s prices compiled on the Financial Markets Dealers Association website. Borrowing costs on the nation’s $500 million of Eurobonds due January 2021 fell four basis points to 3.91 percent today.

Central bank policy makers left their benchmark interest rate unchanged at 12 percent last year to control inflation and stabilize the naira. The inflation rate rose for the second consecutive month in November to 12.3 percent from 11.7 percent, the National Bureau of Statistics said Dec. 17.

Ghana’s cedi strengthened 0.3 percent to 1.9015 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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