Naira Rallies in Longest Streak Since July 2011: Lagos Mover
The naira rallied for a sixth day against the dollar in the longest streak since July 2011 as oil companies sold the U.S. currency and tighter central bank measures introduced this month curbed foreign-exchange demand.
The currency of Africa’s biggest oil producer advanced 0.1 percent to 158.45 per dollar by 11 a.m. in Lagos, the commercial capital, the strongest on a closing basis since June 3. That brings its monthly advance to 0.8 percent, the best since July.
Oil companies are the second-biggest source of dollars after the Central Bank of Nigeria, which offers foreign currency at auctions on Mondays and Wednesdays to maintain exchange-rate stability. The regulator tightened controls of its auctions, replacing a wholesale system with retail sales from Oct. 2.
“The retail system has reduced foreign-exchange demand at the interbank market as banks now buy dollars only on proof of request from their customers,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone.
The policies helped pare the currency’s loss this year to 1.5 percent against the dollar. Ghana’s cedi is Africa’s worst performer in 2013, weakening 14 percent.
The naira is set to continue strengthening this week on “increasing foreign-exchange inflows from oil companies,” Access Bank Plc (ACCESS) analysts, led by Tony Monye, wrote in an e-mailed note today.
Yields on Nigeria’s $500 million of Eurobonds due January 2021 rose one basis point, or 0.01 percentage point, to 5.06 percent.
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