Nigeria’s Naira Climbs Second Day as Oil Companies Sell Dollars

Nigeria’s naira climbed for a second day on speculation that oil companies operating in the West African country sold dollars to fund local operations.

The currency of Africa’s biggest oil producer strengthened less than 0.1 percent to 157.21 per dollar by 2:50 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.

“Some sales by oil companies provided some support,” Sewa Wusu, the Lagos-based head of research at Sterling Capital Ltd., said by phone today. Foreign inflows into a scheduled central bank Treasury bill sale tomorrow will probably add to the naira’s gains, he said.

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, which are used to help stabilize the naira.

Banks bought the entire $150 million offered yesterday. The regulator sold $120 million on Jan. 30, the smallest amount in three auctions. The central bank said Jan. 30 it will sell 184.3 billion naira of T-bills tomorrow.

The yield on the country’s 16.39 percent domestic bonds due January 2022 declined eight basis points to 11.12 percent in the secondary market, according to yesterday’s data compiled on the Financial Markets Dealers Association website. Borrowing costs on Nigeria’s $500 million of Eurobonds due January 2021 rose two basis points to 4.07 percent today.

Ghana’s cedi gained 0.2 percent to 1.9055 per dollar in Accra, the capital.

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