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Naira Rises to Three Weeks High on Inflows, Oil Industry Supply

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Oct. 29 (Bloomberg) -- Nigeria’s naira appreciated to its strongest in three weeks as offshore investors bought the nation’s short-term debt and oil companies sold dollars to lenders.

The currency of Africa’s largest oil producer gained 0.1 percent to 157 per dollar as of 3:10 p.m. in Lagos, the commercial capital, its strongest on a closing basis since Oct. 8, according to data compiled by Bloomberg. The naira has rallied 3.4 percent this year, the best performer in Africa.

Nigeria sold 111.27 billion naira ($708 million) of 91-day, 182-day and 364-day Treasury bills at an auction last week, the Central Bank of Nigeria said today in an e-mailed statement. Oil producing companies, which sell dollars toward the end of the month to meet domestic expenses, are the second-biggest source of the currency after the central bank.

“The naira continues to receive some support in foreign inflows from the global search for yield,” Vetiva Capital Management Ltd. analysts led by Adedayo Idowu wrote in an e-mailed note today.

Debt sold included 34.88 billion naira of 91-day bills at a yield of 12.88 percent and 45 billion naira of 182-day debt at 13.25 percent, according to the central bank. Yields on Nigeria’s 16.39 percent debt maturing January 2022 fell four basis points to 13.34 percent, according to Oct. 24 data on the Financial Markets Dealers Association website.

“Besides inflows to government securities, the market is witnessing month-end sales from a number of oil companies,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone.

The central bank sold $43.5 million at a foreign currency auction at an exchange rate of 155.76 naira per dollar, the Abuja-based bank said today in an e-mailed statement, having offered $100 million. The regulator aims to keep the local currency within a 3 percent band around 155 per dollar.

Rates on Nigeria’s $500 million of Eurobonds due January 2021 fell three basis points to 4.535 percent.

Ghana’s cedi strengthened 0.1 percent to 1.8775 a dollar in Accra, the capital.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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