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Naira falls on dollar shortage

By on August 27, 2014

The naira dropped against the dollar on Monday, with last week’s move by JP Morgan to include the country’s 10-year bond in one of its indexes failing to stimulate strong dollar inflows.

The local currency closed at N162.07 to the dollar, compared with Friday’s close of N161.98, the same level it closed on Thursday prior to JP Morgan’s announcement.

The 2024 bond is due to be added to JP Morgan’s Government Bond Index-Emerging Markets on August 29, in addition to five other bonds already listed, potentially triggering more offshore interest.

But dealers said local bond trading was muted on Monday due to a holiday in Britain, where a number of foreign investors who trade Nigerian debt are based. Yields on the 2024 bond climbed to 11.99 per cent, as against 11.92 per cent on Friday.

Citibank said in a note it expected the naira to get support from potential oil company dollar sales and foreign portfolio inflows this week.

The local unit of Italian oil firm Eni sold $12m on Monday, to start the month-end dollar sales

Nigeria delays second-quarter GDP data by one week

Meanwhile, the Federal Government will delay the release of second-quarter Gross Domestic Product data by a week because of a backlog of work caused by a rebasing exercise, the National Bureau of Statistics said on Monday.

GDP data is scheduled for release 45 days after the end of each quarter, though the NBS does not always keep to a precise schedule with data releases.

The Chief Executive Officer, NBS, Mr. Yemi Kale, told Reuters that “the rebasing in April … took us off our normal quarterly schedule” by creating a backlog of adjusting work.

The rebasing almost doubled the size of its economy to $510bn, making Nigeria Africa’s biggest economy, surpassing South Africa.

 

 

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