Naira Weakens as Banks Buy Least Amount of Dollars in 2 Months
The naira weakened as importers sought dollars after the Nigerian commercial banks bought the least amount of the U.S. currency in two months at an auction today.
The currency of Africa’s biggest oil producer depreciated 0.1 percent to 156.31 a dollar as of 3:30 p.m. in Lagos, the commercial capital, after gaining 0.6 percent yesterday, according to data compiled by Bloomberg.
Nigereia’s central bank sold $43.2 million, the lowest since Nov. 7, after offering $100 million to lenders, according to data on its website. The regulator, which sells dollars at auctions on Mondays and Wednesday is the major supplier of foreign exchange. Fuel imports have been a source of pressure on the naira, according to the Central Bank of Nigeria.
“The reduction tightened supply at the interbank market, putting naira under pressure,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone today.
Nigeria’s inflation rate rose for a second month in November to 12.3 percent from 11.7 percent, the National Bureau of Statistics said Dec. 17. The central bank left the benchmark interest rate unchanged at 12 percent last year.
“Speculation against the naira likely increased ahead of the Jan. 7 auction,” Kunle Ezun and Kenneth Asenime, analysts at Ecobank Transnational Inc. (ETI) in Lagos, wrote in an e-mailed note to clients today.
The rate on the nation’s 10-year naira debt rose 13 basis points to 11.41 percent, according to yesterday’s prices compiled on the Financial Markets Dealers Association website. Yields on the country’s $500 million of Eurobonds due January 2021 was little changed at 3.792 percent.
Ghana’s cedi appreciated for a second day by 0.2 percent to 1.8855 a dollar in Accra, the capital, heading for its lowest since Nov. 22.
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