Naira Caps Biggest Weekly Retreat in 11 on Lower Bank Supply

The naira capped its biggest five-day retreat in 11 weeks as the Central Bank of Nigeria sold the lowest amount of dollars in almost three years and oil companies reduced their supply of the U.S. currency.

The naira depreciated 0.2 percent to 157.50 a dollar as of 4:19 p.m. in Lagos, the commercial capital. The currency of Africa’s biggest oil producer has slid 0.5 percent this week, the biggest decline since the five days to Sept. Aug. 24, according to data compiled by Bloomberg.

The central bank sold $79.9 million at its two scheduled auctions this week, the lowest since December 2009, according to data on the Abuja-based bank’s website. The regulator sells dollars on Mondays and Wednesdays to keep the naira within a 3 percent band around 155 per dollar. The oil industry, which sells dollars to lenders around the month end to meet domestic expenses, is the biggest supplier after the central bank.

“Dollar supply thinned down as the central bank sold a small amount owing to restrictions and oil industry month-end supply is receding,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone today.

The central bank, led by Governor Lamido Sanusi, has left the benchmark interest rate unchanged at a record 12 percent this year, increased lenders’ reserve requirements and limited access to money auctions to stop dealers from buying foreign currency using naira purchased from the bank at a discount.

The yield on the nation’s 16.39 percent naira debt due January 2022 fell 10 basis points to 12.66 percent, according to yesterday’s prices compiled by the Lagos-based Financial Markets Dealers Association. The yield on the country’s $500 million of Eurobonds due January 2021 slipped one basis point to 4.381 percent today.

Ghana’s cedi depreciated less than 0.1 percent to 1.8789 a dollar in Accra, the capital.

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