Naira Strengthens to Week High on Oil Industry Month-End Supply
Nigeria’s naira gained for a second day, advancing to its strongest in a week as oil companies sold dollars to meet month-end local expenses.
The currency of Africa’s biggest oil producer appreciated 0.4 percent to 157.35 per dollar, the strongest intraday level since Feb. 25, as of 11:21 a.m. in Lagos, the commercial capital.
Oil-producing companies, which sell dollars to meet local expenses around the month-end, are the second-biggest source of foreign currency after the Central Bank of Nigeria, which sells dollars at auctions on Mondays and Wednesdays to help manage the exchange rate.
The appreciation of the naira is “due to end-of-month dollar sales by international oil companies which increased the supply of the greenback at the interbank market,” analysts at Lagos-based Greenwich Trust Group Ltd. led by Oladipupo Adekanmbi wrote today in e-mailed note to clients.
The central bank held the benchmark interest rate at a record high 12 percent for an eighth straight time on Jan. 21 to control inflation and stabilize the naira. The nation’s inflation rate fell to 9 percent in January from 12 percent in December, the statistics bureau said Feb. 18.
The yield on the country’s 16.39 percent domestic bonds due January 2022 rose two basis points to 10.62 percent, according to March 1 data compiled on the Financial Markets Dealers Association website.
Yields on Nigeria’s $500 million of Eurobonds due January 2021 fell seven basis points to 4.266 percent today.
Ghana’s cedi was unchanged at 1.9175 per dollar in Accra, the capital.
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