The naira appreciated for a third day as the central bank increased the amount of dollars sold at its twice-weekly auctions and as oil, the nation’s key export, advanced.
The currency of Africa’s biggest crude producer gained 0.1 percent to 157.25 a dollar as of 2:10 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.
The Central Bank of Nigeria sold $450 million at its two auctions this week, the highest in seven, according to data on its website. Oil rebounded from the lowest close in almost two months and extended gains on speculation that China will take measures to stimulate its economy. Nigerian benchmark Bonny Light crude climbed 0.62 percent to $111.47 a barrel.
“Naira is appreciating largely due to sufficient dollar supplies from the central bank,” Kunle Ezun and Kenneth Asenime, Lagos-based strategists at Ecobank Transnational Inc., wrote in a note to clients today.
The central bank kept its benchmark interest rate unchanged at a record 12 percent on Sept. 18 to control inflation and bolster the naira, Governor Lamido Sanusi said. The inflation rate slowed to 11.7 percent in August from 12.8 percent the previous month, the lowest this year, the statistics agency said Sept. 16.
The yield on Nigeria’s 16 percent domestic bonds due June 2019 rose two basis points to 13.37 percent, according to yesterday’s data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due January 2021 fell five basis points to 4.75 percent.
Ghana’s cedi gained less than 0.1 percent to 1.8968 a dollar in Accra, the capital.