Nigeria’s naira snapped four days of gains, paring an earlier rise, as foreign-exchange sales from oil companies operating in the West African nation waned.
The currency of Africa’s biggest oil producer fell 0.3 percent to 158.2 a dollar as of 2:45 p.m. on the interbank market in Lagos, the commercial capital. The naira has risen 2.6 percent this year, the strongest performance in Africa after Zambia’s kwacha, according to data compiled by Bloomberg.
“The supply from oil companies is drying up and as such the rates are moving up,” Femi Okegbenro, the chief dealer at First Securities Discount House Ltd. in Lagos, said in an e-mailed reply to questions today. “The naira had gained on the back of oil companies sales of dollars” and “we expect to see more volatility in the foreign exchange market from such periodic flows.”
The naira had its best five-day performance in more than a year last week as the Central Bank of Nigeria increased lenders’ reserve requirements to 12 percent of total assets from 8 percent after its monetary policy committee meeting on July 24, when it held interest rates at 12 percent. A week later, it restricted access to twice-a-week foreign-exchange auctions to prevent dealers from buying foreign currency using naira purchased from the central bank at a discount.
Yields on the West African nation’s 16 percent domestic debt due 2019 fell two basis points, or 0.02 percentage point, to 16.49 percent, according to yesterday’s prices on the Financial Markets Dealers Association website. Borrowing costs on the West African nation’s $500 million of Eurobonds due 2021 were little changed at 5.14 percent today.
Ghana’s cedi rose 0.1 percent to 1.951 a dollar in Accra, the capital.