Naira Strengthens As CBN Sells Most Dollars In 9 Months

The naira reached the highest in more than five weeks after the Central Bank of Nigeria sold the most dollars in nine months at auctions this week.

The Nigerian currency gained for the first time this week, adding 0.2 per cent to 157.40 per dollar, the highest since March 4, 2013, according to data compiled by Bloomberg.

The CBN sold $300 million at its second auction for the week yesterday, bringing sales this week to $600 million, the most for the twice-weekly sales since July 4, 2012. The regulator sells the U.S. currency to keep the naira within a 3 per cent band around 155 per dollar.

“The naira exchange rate reflected the boost in central bank supply this week,” the Chief Executive Officer of Valuechain Investment Limited, Tunde Ladipo said.

Nigeria’s Monetary Policy Committee kept its benchmark interest rate at a record high of 12 per cent for a ninth consecutive meeting on March 19, 2013 to support the naira, which has depreciated 0.8 per cent this year.

Borrowing costs on Nigeria’s $500 million of Eurobonds due January 2021 slid four basis points, or 0.04 percentage point, to 4.05 percent yesterday.

Source: Leadership