Nigeria’s naira weakened for the first time in three days as dollar demand increased after the government promised refunds to importers for selling fuel at subsidised rates.
The currency of Africa’s largest oil producer depreciated 0.1 percent to 157.73 per dollar as of 4:06 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.
Nigeria is revising its 2012 budget to include 888 billion nairas ($5.6 billion) in fuel subsidies as the spending plans put to lawmakers in December did not make provisions for the financial assistance, the Finance Ministry said in a statement Feb. 16.
“The non-inclusion of subsidies in the 2012 budget proposal created uncertainty over payments, with the result that some importers stayed away, causing a fall in dollar demand, ” Sewa Wusa, currency analyst at Lagos-based Sterling Capital Ltd., said today by phone. “Dollar demand is rising from oil imports after the government assured payments.”
President Goodluck Jonathan backed out of a plan last month to fully remove fuel subsidies after gasoline prices more than doubled from 65 naira a liter, sparking a strike by labor unions.