Nigerian Naira Weakens as Oil Import Permits Spur Dollar Demand

Nigeria’s naira fell the most in almost a week on demand for dollars to fund gasoline imports.

The currency of Africa’s largest oil producer weakened 0.1 percent, the most since Jan. 23 on a closing basis, to 157.13 a dollar as of 3:42 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.

Nigeria relies on imports to meet 70 percent of its fuel needs because of inadequate refining capacity, according to the Petroleum Ministry. Fuel imports have been a source of pressure on the naira, according to the central bank.

“Some oil importers got their import permit from the Pipeline and Petroleum Pricing Regulatory Agency last week and are demanding dollars,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone today.

The Central Bank of Nigeria kept its benchmark interest rate unchanged for the eighth time on Jan. 21. The regulator, which sells dollars to lenders at auctions on Mondays and Wednesdays to stabilize the naira, sold $150 million at today’s auction, unchanged from the sale on Jan. 23, it said in an e-mailed statement.

The inflation rate in December eased to 12 percent, from 12.3 percent in the previous month, as the effects of flooding that damaged agricultural output last year began to subside.

The yield on the country’s 16.39 percent domestic bonds due January 2022 fell two basis points 11.28 percent in the secondary market, according to Jan. 25 data on the Financial Markets Dealers Association website.

The yield on $500 million of Eurobonds due January 2021 rose three basis points to 3.802 percent today.

Ghana’s cedi weakened 0.1 percent to 1.8985 a dollar in Accra, the capital.

Before it's here, it's on the Bloomberg Terminal.