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Naira Weakens for Fourth Day on Demand as Bank Cuts Sale

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Jan. 16 (Bloomberg) -- The naira depreciated for a fourth day on higher demand for the U.S currency after the Nigerian central bank cut the size of its dollar sales this week, reducing supply.

The currency of Africa’s biggest oil producer weakened 0.1 percent to 157.09 per dollar as of 3:30 p.m. in Lagos, the commercial capital. The naira gained 3.9 percent last year, the strongest performance among African currencies tracked by Bloomberg.

The Central Bank of Nigeria sold $108.48 million at an auction today, bringing sales this week to $120.30 million, a 38 percent decline compared with $193.20 million last week, according to data on its website. The regulator sells foreign exchange at auctions on Mondays and Wednesdays to stabilize the naira. Fuel imports have been a source of pressure on the naira, according to the Abuja-based bank.

“Dollar demand exceeded the supply this week as businesses resumed for the year,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone today.

Yields on 10-year naira debt rose 13 basis points to 11.44 percent, according to yesterday’s prices compiled on the Financial Markets Dealers Association website. Borrowing costs on the nation’s $500 million of Eurobonds due January 2021 declined two basis points to 3.736 percent today.

Ghana’s cedi weakened for a fifth day by 0.1 percent to 1.9075 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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