Naira Gains Most in Seven Weeks as Bank Boosts Dollar Supply

Nigeria’s naira gained the most in seven weeks against the dollar after the central bank increased supply of the U.S. currency at an auction.

The currency of Africa’s biggest oil producer appreciated as much as 0.5 percent, the biggest intraday advance since Jan. 14, to 157.25 per dollar. It was trading at 157.38 by 5 p.m. in Lagos, the commercial capital.

The Central Bank of Nigeria sold $234.9 million at an auction today, compared with $200 million at the previous sale on Feb. 27, the Abuja-based bank said in an e-mailed statement. The regulator, which sells dollars at auctions on Mondays and Wednesdays to help manage the exchange rate, is the major supplier.

“The central bank is intervening to bridge a shortfall in dollar supply and support the local unit,” Sewa Wusu, an analyst at Lagos-based Sterling Capital Ltd., said by phone.

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 12 basis points, or 0.12 percentage point, to 4.21 percent today.

Ghana’s cedi gained 1.9088 per dollar in Accra, the capital.

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