The naira declined for a fifth day, reaching its lowest in more than five weeks on increased demand for dollars by oil importers and as the Central Bank of Nigeria (CBN) cut the amount of U.S. dollars sold at yesterday’s auction.
The naira weakened by 0.1 per cent to N158.83 per dollar, the lowest on a closing basis since March 14, according to data compiled by Bloomberg.
Nigeria relies on imports to cover 70 per cent of the fuel needs because of inadequate refining capacity. Those shipments into the country are a source of pressure on the naira, according to the CBN. The apex bank sold $246.5 million at an auction yesterday, compared with $266.2 million at the previous sale on April 17, it said in an e-mailed statement.
The naira weakened “on huge dollar demand by oil importers,” Access Bank analysts led by Tony Monye and Michael Ndiomu, wrote in a note. The drop in the CBN’s supply also added pressure on the naira, Tunde Ladipo, Chief Executive Officer of Lagos-based Valuechain Investment Limited, said by phone.
Borrowing costs on the nation’s local-currency debt due January, 2022, fell four basis points, or 0.4 per- centage point, to 11.44 percent, according to April 19 prices on the Lagos-based Financial Markets Dealers Association website.
Yields on Nigeria’s $500 million of Eurobonds due January 2021 fell three basis points to 4.04 per cent yesterday.
Ghana’s cedi retreated 0.3 percent to 1.9675 per dollar in Accra, the capital, the lowest on record.
source: The Nation
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