Nigerian Naira Rises to Highest in Week on Investor Inflows

Nigeria’s naira appreciated for a second day, reaching its highest in more than a week, as dollar inflows into the nation’s fixed-income securities boosted supply.

The currency of Africa’s biggest oil producer gained less than 0.1 percent to 157.28 per dollar by 3:30 p.m. in Lagos, the commercial capital, its strongest level on a closing basis since Feb. 11.

Nigeria plans to sell 170.65 billion naira ($1.1 billion) of 91-day, 182-day and 364-day treasury bills at an auction today, the Central Bank of Nigeria said Feb. 13. The nation’s one-year bill yield fell to the lowest in 16 months at a Feb. 6 sale, as offshore demand took bids to a record. The naira has gained from inflows to oil companies investing in Nigeria’s hydrocarbons and portfolio funds, Governor Lamido Sanusi said Jan. 21.

“The naira is supported by dollar inflows from foreign investors buying various local-currency debt securities,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone today. “Interest on the bills is sustained following the release of lower headline inflation figures.”

The nation’s inflation rate fell to 9 percent in January from 12 percent in December, the lowest level since April 2008, as the effect of a year-earlier reduction in fuel subsidies dropped out of the calculation, the Abuja-based National Bureau of Statistics said Feb. 18.

Currency Auction

The central bank sold $120 million at a foreign currency auction today to support the naira, matching the previous sale on Feb. 18, at 155.74 per dollar, it said in an e-mailed statement.

The yield on the country’s 16.39 percent domestic bonds due January 2022 declined eight basis points to 10.41 percent in the secondary market, according to yesterday’s data on the Financial Markets Dealers Association website.

Borrowing costs on Nigeria’s $500 million of Eurobonds due January 2021 fell two basis points to 4.385 percent today.

Ghana’s cedi declined for a third day, down 0.1 percent to 1.9045 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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