Nigeria’s Naira Retreats as Sanusi Says Inflation Rise Expected
The naira retreated against the dollar after Central Bank of Nigeria Governor Lamido Sanusi said an increase in March inflation was within estimates, adding to speculation that rates will be kept on hold.
The currency of Africa’s biggest oil producer fell 0.2 percent to 157.405 per dollar on the interbank market as of 11:53 a.m. in Lagos, the commercial capital. The naira has gained 3.1 percent against the dollar this year, according to data compiled by Bloomberg.
Inflation accelerated to 12.1 percent in March as food prices increased, the National Bureau of Statistics said yesterday. Sanusi said the March inflation data were in line with the bank’s estimate, with the bank still expecting a peak of 14.5 percent in the third quarter and a gradual slowdown to below 10 percent by the end of 2013. The central bank raised its policy rate by 6 percentage points to a record 12 percent since 2010 to curb price pressures.
“We retain our view that policy rates will remain on hold at 12 percent for at least the next several months,” CSL Stockbroker Ltd. analysts, including London-based Alan Cameron, wrote in a research report today.
Yields on Nigeria’s $500 million of 2021 notes fell for a third day, declining three basis points to 5.43 percent. Borrowing costs on 10.75 percent notes due 2014 fell eight basis points to 14.91 percent, according to April 25 data compiled on the Financial Markets Dealers Association website.
Ghana’s cedi fell 0.1 percent to 1.855 per dollar in Accra, the capital, extending its 12 percent decline this year.
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