Naira Appreciates Against Dollar On Robust Greenback Sales Bet

The naira appreciated for the first time in four days against the dollar on bets that the central bank and some oil companies sold the U.S. currency.

The currency of Africa’s biggest oil producer gained 0.3 percent to 162.20 per dollar as of 4:05 p.m. in Lagos, according to data compiled by Bloomberg. Nigeria sold $250 million at a foreign-currency auction yesterday, less than the $256.7 million demanded by lenders, with the marginal rate, which is also used as the prevailing exchange rate at 156.70 per dollar, unchanged from the previous auction, according to the Central Bank of Nigeria.

“Oil companies and the central bank sold an unspecified amount of dollars to some banks yesterday, which has helped to ease the shortfall at the official auction and lifted naira in today’s trading,” Tunde Ladipo, chief executive of Lagos-based Valuechain Investment Ltd., said by phone today. Muhammed Abdullahi, a spokesman for the central bank in Abuja, didn’t immediately respond to phone calls seeking comment.

The central bank on Nov. 21 lowered the midpoint of its exchange-rate band at the auctions to 155 naira per dollar from 150 naira as rising imports and weakening oil prices increased pressure on the currency. Sub-Saharan Africa’s second-biggest economy depends on oil exports for more than 95 percent of foreign income, according to the Finance Ministry.

Source: Bloomberg.com