Nigeria’s naira depreciated for a second day and headed for its lowest this month as importers demanded dollars to pay gasoline bills and as oil, the country’s key export, retreated.
The currency of Africa’s biggest oil producer weakened 0.3 percent to 158.15 per dollar as of 12:45 p.m. in Lagos, the commercial capital. A close at this rate will be the lowest since Feb. 28, according to data compiled by Bloomberg.
Nigeria relies on imports to cover 70 percent of its own fuel needs because of inadequate refining capacity, and those shipments into the country are a source of pressure on the naira, according to the central bank. Bonny Light Crude, the nation’s main export grade, slid for a second day, dropping 0.4 percent to $113.14 in New York. Brent crude fell as industrial production slowed in China, the world’s second-biggest oil consumer, and Saudi Arabia boosted output.
“We’ve seen increase in dollar demand from oil importers and dealers bringing in consumer goods,” Abubakar Mohammed, chief executive of Lagos-based Forward Marketing Bureau de Change Ltd., said by phone. “The outlook of the crude oil market is also important for the naira exchange rate.”
Foreign-currency reserves in Africa’s most populous country rose to $47.56 billion, the highest level since at least 2010, the Central Bank of Nigeria in Abuja said in a March 4 statement on its website.
The steady increase since early 2012 means the central bank has “enough ammunition” to address a temporary demand-supply mismatch in the foreign-exchange market, Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd., Africa’s largest bank by assets, said in e-mailed comments today.
Yields on Nigeria’s $500 million of Eurobonds due January 2021 fell 15 basis points to 4.11 percent.
The yield on the country’s 16.39 percent domestic bonds due January 2022 rose 25 basis points to 11.26 percent, according to March 8 data compiled on the Financial Markets Dealers Association website.
Ghana’s cedi gained 0.5 percent to 1.9115 per dollar in Accra, the capital.
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