Nigerian Naira Gains as Investors Buy Domestic T-Bills and Bonds

Nigeria’s naira, the currency of Africa’s biggest oil producer, strengthened as foreign investors brought dollars into the country to buy domestic short- and long-term debt.

The naira gained as much as 1.1 percent before trading less than 0.1 percent higher at 157.29 a dollar by 12:39 p.m. in Lagos, the commercial capital.

The Central Bank of Nigeria will auction 164.9 billion naira ($1.05 billion) of 91-, 182- and 364-day Treasury bills today, the regulator said on Jan. 16. Nigeria will also sell as much as 110 billion naira in bonds, the Abuja-based Debt Management Office said in a statement on its website.

“Dollar inflows from foreign investors buying fixed income securities are providing support to the naira today,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone.

Central bank Governor Lamido Sanusi said relative stability in the currency may be attributed to more foreign exchange from oil companies and investor inflows, in comments to reporters after keeping the benchmark interest rate unchanged for an eighth meeting on Jan. 21.

The yield on Nigeria’s 16.39 percent domestic bonds due January 2022 rose four basis points to 11.23 percent, according to yesterday’s data on the Financial Markets Dealers Association website. The yield on $500 million of Eurobonds due January 2021 was little changed at 3.725 percent today.

Ghana’s cedi retreated 0.2 percent to 1.9105 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: Vernon Wessels at vwessels@bloomberg.net