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Naira Falls First Day in Four as Dollar Demand Outweighs Supply

By on March 22, 2012

The naira weakened for the first time in four days as demand for dollars from oil importers and businesses outweighed supply.

The currency of Africa’s biggest oil producer declined 0.1 percent to 157.5975 per dollar on the interbank market as of 12:20 p.m. in Lagos, according to data compiled by Bloomberg.

“Dollar demand has deepened from oil importers and commercial businesses making imports for the Christian Easter celebrations due early next month,” Sewa Wusu, currency analyst at Lagos-based Sterling Capital Ltd., said by phone.

Nigeria approved a tender for 3.57 million metric tons of gasoline imports for the second quarter on March 12. Fuel imports have been a leading source of pressure on the naira, according to the Central Bank of Nigeria. Africa’s most populous country of more than 160 million people, with Muslims and Christians almost at par, experiences higher imports of personal and household items during religious festivities.

“Dollar supply has been boosted from inflow into fixed income securities and supply at currency auction.”

Nigeria sold $200 million at a foreign-currency auction yesterday, with lenders buying the entire amount on offer, the Abuja-based central bank said. The marginal rate, which is also used as the prevailing exchange rate, was 156.06 naira, unchanged from the previous sale on March 19.