Naira hits four-week high on dollar sales

The naira appreciated the most in four weeks as an oil producer was said to sell dollars to lenders, boosting supply.

The currency of Africa's biggest oil producer climbed 0.2 per cent to N157.25 per dollar as of 12:57 p.m. in Lagos, the commercial capital. The naira gained for a second week by less than 0.1 percent.

Dealers attributed the gains to inflows of $100m from an oil producer, a Lagos-based analyst at Ecobank Transnational Incoporated, Mr. Kunle Ezun, said.

Governor of Central Bank of Nigeria (CBN), Mr. Lamido Sanusi, said, last month that the naira was being buoyed in part by oil company inflows.

Oil producing companies periodically sell dollars to lenders to meet local spending needs and are the second-biggest source of foreign currency after the CBN, which sells dollars at auctions on Mondays and Wednesday to stabilise the naira.

The CBN sold $120m last week on the two auction days.

The yield on the country's 16.39 per cent domestic bonds due January 2022 rose eight basis points to 10.48 per cent, according to data compiled on the Financial Markets Dealers Association last Thursday.

The naira appreciated for a second day on Wednesday, reaching its highest in more than a week, as dollar inflows into the nation's fixed-income securities boosted supply.

The yield on the country's 16.39 per cent domestic bonds due January 2022 declined eight basis points to 10.41 per cent in the secondary market, according to yesterday's data on the Financial Markets Dealers Association website.

The CBN sold N170.65bn ($1.1bn) of 91-day, 182-day and 364-day treasury bills at an auction on Wednesday.

The nation's one-year bill yield fell to the lowest in 16 months at a February 6 sale, as offshore demand took bids to a record.

The nation's inflation rate fell to nine per cent in January from 12 per cent in December, the lowest level since April 2008, as the effect of a year-earlier reduction in fuel subsidies dropped out of the calculation, the Abuja-based National Bureau of Statistics said last Monday. Bloomberg