Nigeria’s Naira Falls Most in 11 Weeks on Europe Crisis

Nigeria’s naira weakened for a second day, depreciating the most in two weeks against the dollar as higher Spanish and Italian borrowing costs suggested the euro region debt crisis is deepening, prompting some foreign investors to sell riskier assets.

The currency of Africa’s biggest oil producer weakened 0.5 percent to 159.97 per dollar as of 3:22 p.m. in Lagos, the commercial capital, its biggest decline on a closing basis since March 12, according to data compiled by Bloomberg.

“The market is still witnessing a sell-off of securities, some motivated by the Eurozone crisis and some by inflation concern,” Sewa Wusu, a currency analyst at Lagos-based Sterling Capital Ltd., said by phone. Investors are selling fixed-income securities, including Treasury bills and bonds, he said.

Emerging-market stocks fell for the first time in five days as Spanish and Italian borrowing costs rose. Greece will hold an election next month that may determine whether it meets bailout conditions and remains in the euro. Nigerian inflation accelerated to 12.9 percent in April, the fastest since October 2010, from 12.1 percent in March, the National Bureau of Statistics said May 15.

Highest Weekly Sale

The Central Bank of Nigeria sold $250 million at a foreign-currency auction today at $155.75 naira per dollar, the Abuja-based bank said in an e-mailed statement. The regulator sold $500 million this week, the highest weekly sale since Feb. 15, according to data on its website. Nigeria sells the U.S. currency to lenders on Mondays and Wednesdays to support the naira.

The central bank kept its benchmark interest rate unchanged at 12 percent for a fourth consecutive meeting on May 22 to bolster the currency and curb inflation.

The yield on Nigeria’s domestic bonds due 2015 rose four basis points to 15.27 percent, according to the May 28 data on the Financial Markets Dealers Association website. Yields on the Eurobonds due 2021 rose two basis points to 5.675 percent in London.

Ghana’s cedi appreciated less than 0.1 percent to 1.8928 per dollar, in Accra, the capital.

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