Nigerian Naira Retreats Most in Two Weeks as Bank Sales DeclineEmele Onu
Nigeria’s naira depreciated to the lowest in two weeks as investors demanded dollars after the central bank sold the least foreign currency at auctions in more than a month.
The currency of Africa’s biggest oil producer retreated 0.2 percent to 158.40 per dollar by 2:51 p.m. in Lagos, Nigeria’s commercial capital, the weakest on an intraday basis since April 3, according to data compiled by Bloomberg.
The Central Bank of Nigeria sold $266.2 million at an auction today, bringing sales this week to $498.7 million, the lowest since the period ending March 13, according to data on the Abuja-based bank’s website. The regulator sells the U.S. currency at auctions on Mondays and Wednesdays to keep the naira within a 3 percent band above or below 155 per dollar.
There was “increased dollar demand to cover import bills,” Kunle Ezun and Kenneth Asenime, analysts at Ecobank Transnational Inc. in Lagos, wrote in an e-mailed note to clients today. Dealers anticipated more dollars at the auctions, Sewa Wusu, an analyst at Lagos-based Sterling Capital Ltd., said by phone.
Nigeria relies on imports to cover 70 percent of its own fuel needs because of inadequate refining capacity, and those shipments into the country are a source of pressure on the naira, according to the central bank.
Borrowing costs on the nation’s local-currency debt due January 2022 rose four basis points or 0.04 percentage point, to 11.05 percent, according to yesterday’s prices on the Lagos-based Financial Markets Dealers Association website.
Yields on Nigeria’s $500 million of Eurobonds due January 2021 were little changed at 4.01 percent today.
Ghana’s cedi weakened 0.2 percent to 1.9485 per dollar in Accra, the capital.