Nigeria’s Naira Advances After Oil Company, Central Bank SalesChris Kay
Nigeria’s naira climbed after the central bank kept dollar sales at the highest in three weeks and on speculation that oil companies sold the currency.
The currency of Africa’s largest oil producer rose 0.1 percent to 157 a dollar as of 12:45 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.
The naira has gained from foreign-currency inflows to oil companies investing in the country’s hydrocarbons and portfolio funds, Central Bank of Nigeria Governor Lamido Sanusi said after keeping the benchmark interest rate unchanged for the eighth time on Jan. 21. Oil companies periodically sell dollars to lenders to meet local spending needs and are the second-biggest source of foreign currency after the Abuja-based central bank’s twice-weekly auctions.
“Sales from some oil companies also appear to have supplemented the CBN’s supply,” Ridle Markus, Dumisani Ngwenya and Mike Keenan, Africa strategists at Absa Capital in Johannesburg, wrote in e-mailed comments today. “With the naira receiving support from steady oil inflows, increased foreign participation in the local debt market, regular CBN foreign exchange sales and relatively tight monetary policy, we expect the currency to continue to trade in a narrow range in the near-term.”
The central bank sold $150 million at yesterday’s auction, the same amount as at the Jan. 23 sale.
The yield on the country’s 16.39 percent domestic bonds due January 2022 fell five basis points to 11.28 percent in the secondary market, according to yesterday’s data on the Financial Markets Dealers Association website.
The yield on $500 million of Eurobonds due January 2021 rose one basis point to 3.83 percent today.
Ghana’s cedi climbed 0.1 percent to 1.9005 a dollar in Accra, the capital.