Naira Rises to 4-Week High on Central Bank, Oil-Industry Dollars

Nigeria’s naira rose to the highest in almost four weeks as the central bank sold the U.S. currency at an auction and oil companies were also said to sell dollars.

The currency of Africa’s biggest oil producer rose 0.3 percent to 158.10 per dollar by 4:10 p.m. in Lagos, the commercial capital, the highest since March 8, according to data compiled by Bloomberg.

The Central Bank of Nigeria sold $237 million at an auction today, compared with $300 million at the previous sale on March 27, it said in an e-mailed statement.

The Abuja-based bank offers foreign currency at auctions on Mondays and Wednesdays to maintain exchange-rate stability. It didn’t hold a sale on April 1 because of a public holiday. Oil companies, which sell dollars to meet domestic expenses, are the second-biggest source of the currency after the central bank.

The “central bank’s sale complemented about $100 million supplied by two oil companies to support the naira,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone.

Yields on the government’s local-currency bonds due June 2019 declined 31 basis points to 10.65 percent, according to yesterday’s prices compiled on the Financial Markets Dealers Association website.

Borrowing costs on Nigeria’s $500 million of Eurobonds due January 2021 slipped seven basis points to 4.31 percent today.

Ghana’s cedi declined 0.1 percent to 1.9410 per dollar in Accra.

Source: Bloomberg