Naira Records Best Week Since August After Oil Company SalesChris Kay
Nigeria’s naira strengthened a fourth day to complete its best one-week performance since August after oil companies were said to sell dollars to meet local expenses.
The currency of Africa’s biggest oil producer rose 0.1 percent to 157.45 per dollar by 1 p.m. in Lagos, the commercial capital, according to data compiled by Bloomberg. The naira has gained 0.7 percent this week, it’s best performance since the five days through Aug. 17.
Oil companies, including the state-owned Nigerian National Petroleum Corp., are the second-biggest source of dollars after the Central Bank of Nigeria, which offers foreign currency at auctions on Mondays and Wednesdays to maintain exchange-rate stability.
“The naira strengthened on the back of foreign-exchange sales from oil companies earlier this week, expected dollar sales from the NNPC, and to a lesser extent, some modest foreign-capital inflows,” Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd. in London, said in an e-mail. “It is likely that dollar-naira will drift higher once the NNPC effect dissipates next week.”
The central bank sold $237 million at an April 3 auction, compared with $300 million at the previous sale on March 27. It didn’t hold an offer on April 1 because of a public holiday.
Borrowing costs on Nigeria’s local-currency debt due January 2022 rose six basis points, or 0.06 percentage point, to 10.89 percent, according to yesterday’s prices compiled by the Financial Markets Dealers Association.
Yields on Nigeria’s $500 million of Eurobonds due January 2021 declined three basis points to 4.33 percent today.
Ghana’s cedi fell less than 0.1 percent to 1.9425 per dollar in Accra.