Naira Falls 3rd Day on Year-End Demand as Currency Auction Ends
The naira fell for a third day, reaching its lowest in a month, as seasonal dollar demand increased and the Central Bank of Nigeria ended its foreign- currency auctions for the year.
The currency of Africa’s biggest oil producer weakened 0.1 percent to 158.05 per dollar as of 2:04 p.m. in Lagos, the commercial capital. A close at this price would be its weakest since Nov. 16. The naira has gained 2.7 percent this year, the second-best performing currency in Africa, according to data compiled by Bloomberg.
There is high dollar demand due to seasonal, year-end imports and traveling, Jide Nwaogwugwu, a research analyst at Lagos-based Dunn Loren Merrifield Ltd., said by phone today. “There will be demand pressure while the CBN is not selling.”
The central bank said last week it will end dollar sales to lenders at twice-weekly auctions today and resume on Jan. 7. The Abuja-based regulator sold $300 million today, the most since an Aug. 8 sale, according to data compiled by Bloomberg.
Nigeria’s inflation rate rose for the second consecutive month in November to 12.3 percent from 11.7 percent, the National Bureau of Statistics said Dec. 17. The central bank left its benchmark interest rate unchanged at 12 percent this year to control inflation and stabilize the naira.
Yields on 10-year naira debt were unchanged at 11.88 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 fell one basis point to 4.13 percent today.
Ghana’s cedi declined 0.1 percent to 1.896 per dollar in Accra, the capital.
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