Naira Falls to 5-Week Low on Corporate Demand After Auction

The naira reached its lowest in five weeks against the dollar as companies increased demand for the U.S. currency after the central bank sold less than the amount offered at an auction today.

The currency of Africa’s biggest oil producer declined 0.2 percent to 158.95 per dollar by 3:10 p.m. in Lagos, the commercial capital, the lowest since March 14, according to data compiled by Bloomberg.

The Central Bank of Nigeria sold $272.3 million, less than the $300 million on offer, the Abuja-based bank said in an e-mailed statement. The regulator sells dollars at auctions on Mondays and Wednesdays to keep the naira within a 3 percent band above or below 155 per dollar.

“Central bank restricted sales to importers it adjudged as having genuine import documents or confirmed letters of credit,” Kunle Ezun, analyst at Ecobank Transnational Inc. in Lagos, said by phone. “Other importers resorted to the interbank market for dollars, putting pressure on the naira.”

Nigeria relies on imports to cover 70 percent of the fuel needs in Africa’s second-biggest economy because of inadequate refining capacity. Those shipments into the country are a source of pressure on the naira, according to the central bank.

Borrowing costs on the country’s 16.39 percent domestic bonds due January 2022 fell six basis points to 11.36 percent, according to yesterday’s data compiled by Bloomberg. Yields on the nation’s $500 million of Eurobonds due January 2021 declined six basis points to 4.06 percent today.

Ghana’s cedi gained for a second day, adding 0.2 percent to 1.9655 per dollar in Accra, the capital.

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