Naira Rises First Time in Nine Days as Central Bank Intervenes

The naira advanced for the first time in nine days as the Central Bank of Nigeria sold dollars directly to the market outside of its regular currency auctions.

The currency of Africa’s biggest oil producer climbed 0.1 percent to 158.70 per dollar by 3 p.m. in Lagos, the commercial capital, paring its retreat this month to 0.1 percent. The naira has dropped 1.6 percent this year, according to data compiled by Bloomberg.

The central bank sold $86 million today to lenders outside its scheduled Monday and Wednesday auctions to keep the currency stable, Ugochukwu Okoroafor, a spokesman for the regulator, said by phone from Enugu in southeast Nigeria.

“Once they see the offer go to 159 then it’s a trigger for them to come to the market,” Augustus Nwachukwu, a money-market trader at Stanbic IBTC Holding Co. (STANBIC), said by phone today from Lagos.

The central bank sold $246.5 million to lenders yesterday, down from $266.2 million on April 17. The regulator uses the auctions to stabilize the naira as the cost of importing refined fuel, which accounts for 70 percent of the local gasoline market, boosts dollar demand and puts pressure on the currency.

The central bank has enough reserves to defend the naira and “keep it where we want,” Governor Lamido Sanusi said in a March 24 interview in Lagos. Nigeria’s foreign-currency reserves advanced 10 percent this year to $48.8 billion, according to April 18 data compiled by the central bank.

Borrowing costs on the country’s 16.39 percent domestic bonds due January 2022 fell four basis points to 11.42 percent, according to yesterday’s data compiled by Bloomberg. Yields on the nation’s $500 million of Eurobonds due January 2021 declined four basis points to 4.07 percent today.

Ghana’s cedi gained 0.1 percent to 1.9685 per dollar in Accra, snapping five days of declines.

To contact the reporter on this story: Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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