Nigerian Naira Falls 1st Time in 5 Days on Demand Before Auction

Nigeria’s naira retreated for the first time in five days as as demand for dollars increased before the central bank’s first foreign-exchange auction of the week.

The currency of Africa’s biggest oil producer depreciated 0.1 percent to 157.60 per dollar as of 12:36 p.m. in Lagos, the commercial capital, its biggest decline since March 28, according to data compiled by Bloomberg.

The Central Bank of Nigeria sold $237 million at an auction on April 3, its only sale of foreign currency last week because of a public holiday. 

That compared with $576.6 million sold in the previous week. The regulator offers foreign currency at auctions on Mondays and Wednesdays to maintain exchange-rate stability.

“There is increased demand for the dollar today as there was only one auction last week,” Sewa Wusa, head of research at Sterling Capital Ltd., said by phone from Lagos today.

Borrowing costs on Nigeria’s local-currency debt due January 2022 rose two basis points to 10.91 percent, according to April 5 prices compiled by the Financial Markets Dealers Association. 

Yields on Nigeria’s $500 million of Eurobonds due January 2021 declined six basis points to 4.23 percent today.

Ghana’s cedi fell 0.1 percent to 1.9445 per dollar in Accra.

source:Bloomberg/businessweek