Naira Snaps 2-Day Decline on Central Bank Dollar Sale

Nigeria’s naira strengthened the most in three months after the state-owned oil company was said to have sold dollars to lenders.

The currency of Africa’s biggest oil producer rallied 0.6 percent to 156.1000 a dollar as of 4:16 p.m. in Lagos, the biggest gain on a closing basis since Oct. 4, according to data compiled by Bloomberg. The currency lost 0.4 percent last week.

Nigerian National Petroleum Corp. periodically sells dollars to lenders to meet local spending needs. The oil industry is the second-biggest source of foreign currency after the Central Bank of Nigeria, which sells dollars at auctions on Mondays and Wednesday. The central bank sold $150 million yesterday in its first sale this year.

NNPC sold an undisclosed amount of dollars to banks today, which supported the naira, Augustus Nwachukwu, an analyst at Lagos-based Stanbic IBTC Holdings Co., said by phone. Tumini Green, an NNPC spokesman, had no immediate comment when contacted by Bloomberg.

Nigeria plans to sell 166 billion naira ($1.1 billion) of 91-, 182- and 364-day Treasury bills at an auction Jan. 10, the central bank said yesterday.

“The naira is supported by central bank dollar supply and inflows for the purchase of Treasury bills,” Sewa Wusu, analyst at Lagos-based Sterling Capital Ltd., said by phone.

The rate on the nation’s 10-year naira debt fell 24 basis points to 11.28 percent, according to yesterday’s prices compiled on the Financial Markets Dealers Association website. Yields on the country’s $500 million of Eurobonds due January 2021 slid seven basis points to 3.854 percent.

The Monetary Policy Committee left the benchmark interest rate unchanged at 12 percent last year. Nigeria’s inflation rate rose for a second month in November to 12.3 percent from 11.7 percent, the National Bureau of Statistics said Dec. 17.

Ghana’s cedi strengthened 0.4 percent to 1.8895 per dollar in Accra, the capital.

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.