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Naira Heads For 4-Month Low As Oil Drops

By on June 4, 2012

The naira fell for a second day against the dollar, heading for the lowest in more than four months, as crude prices declined and foreign investors were said to sell naira debt.

The currency of Africa’s biggest oil producer retreated 0.4 percent to 161.2325 per dollar as of 11:06 a.m. in Lagos, the commercial capital, according to data compiled by Bloomberg. That would be the lowest since Jan. 30 on a closing basis.

Oil fell for a fifth day in New York to the lowest price in almost eight months on signs of an economic slowdown in the U.S. and China. Emerging-market stocks fell, dragging thebenchmark index to a six-month low.

“The sharp drop in the oil price and foreign investor demand for the greenback amid reports they are cutting long T- bill positions have contributed to the weakness,” Leon Myburgh and Coura Fall, Africa strategists at Citigroup Inc. in Johannesburg, wrote in an e-mailed note to clients today.

The yield on Nigeria’s domestic bonds due 2018 rose six basis points to 15.53 percent, according to the June 1 data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due 2021 gained two basis points to 5.782 percent.