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By NBF News
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Nigeria is depleting its foreign currency reserves to defend the naira and running down oil savings before elections next year.

According to Bloomberg on Tuesday, this may affect investor confidence as the government prepares its first global bond sale.

Reserves fell by almost $10bn to $33.1bn in the year through November 29, according to data compiled by the Central Bank of Nigeria.

The reserves include the government's Excess Crude Account.

Fitch Ratings had cut its outlook for the sovereign debt rating on Nigeria, Africa's biggest oil producer, even as crude prices held above $80 a barrel.

With the threat of violence before April's election increasing, investors may move to take more money out of the country, straining the central bank's policy of keeping the naira pegged close to N150 to the dollar.

Bloomberg reports that as the money drains away, the West African nation pushes ahead with a $500m bond sale for this month.

'They aren't saving for infrastructure, they aren't saving for a rainy day,' sub-Saharan Africa analyst at London-based Fitch, Ms. Veronica Kalema, said. 'That's no way to manage an oil economy,' she added.

Concern that violence would disrupt next year's election had been boosting foreign currency demand at the biweekly central bank auctions since September, Kalema said.

It also sent the yield on Nigeria's 91-day Treasury bills to 7.9 per cent on November 26 from a record low of 1.04 per cent on March 11, according to central bank data.

Ghana's 8.5 per cent fixed-rate Eurobond, due October 2017, yielded 6.06 per cent as at 9.32am in Accra, down from 7.53 per cent on March 1.

Militants have stepped up assaults on oil installations, including those owned by Exxon Mobil Corporation and Afren Plc.

Alleged militant leader, Henry Okah, said in a telephone interview from jail on Monday that the insurgency would not end until the government allowed the region to control its oil wealth.