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Naira Strengthens First Day In Four On Dollar Sales

By on June 19, 2012

Nigeria’s naira appreciated for the first time in four days as the central bank sold dollars and gains by pro-bailout parties in Greek elections boosted demand for riskier assets.

The currency of Africa’s biggest oil producer gained 0.5 percent to 163.73 per dollar on the interbank market at close in Lagos, the most since June 6. The advance pared this year’s decline to 0.3 percent, according to data compiled by Bloomberg.

The Central Bank of Nigeria sold $400 million at a foreign- currency auction today, matching the amount sold on June 13, which was the most since Feb. 8, at 155.90 naira per dollar, the Abuja-based bank said in an e-mailed statement. Emerging-market stocks advanced after Greece’s New Democracy and Pasok parties won enough seats in parliament to forge a majority government, reducing concern the country would abandon the euro.

“The positive election outcome in Greece will ease global risk aversion,” Adedayo Idowu, a Lagos-based analyst at Vetiva Capital Management Ltd., wrote in an e-mailed note to clients today. This may lead to increased inflows of foreign funds into Nigeria, he wrote.

The yield on Nigeria’s domestic bonds due 2018 rose one basis point to 15.58 percent, according to the June 15 data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due 2021 increased two basis points to 5.594 percent today.