Naira appreciates for second day on dollar sales

Nigeria’s naira appreciated for a second day against the dollar on bets month-end dollar sales by oil companies and increased oil exports by sub-Saharan Africa’s second largest economy will support the local currency.

The currency of Africa’s biggest oil producer strengthened 0.1 percent to 157.53 per dollar as of 11:30 a.m. in Lagos, the commercial capital. The oil industry, which is the second major supplier of foreign exchange after the central bank, often sells dollars to lenders around the month-end period to meet domestic spending needs.

Nigeria plans to boost crude exports in May to a 10-month high, by exporting 69.3 million barrels, or 2.24 million barrels a day, the most since July. That compares with 78 cargoes totaling 2.22 million barrels a day for April, according to loading plans obtained by Bloomberg News. “Month-end implies naira strength as energy firms increase their offerings of U.S. dollars on theinterbank market,” Celeste Fauconnier and Nema Ramkhelawan-Bhana, Africa analysts at Rand Merchant Bank in Johannesburg, wrote in an e-mailed note today.

“The increase in export volume should provide some cushion to the Nigerian foreign exchange reserve in the face of global oil demand” and provide support for the naira, Lagos-based Cowry Assets Management Ltd. analysts led by Edgar Ebinum, wrote in an e-mailed note today. Foreign reserves have risen 7.9 percent this year to $35.6 billion as of March 29, the central bank published on its website today.

The nation’s bonny light crude is trading at more than $50 a barrel above the $72 a barrel incorporated into Nigeria’s 2012 budget, according to the bank. The yield on Nigeria’s $500 million of dollar bonds due 2021 fell 10 basis points to 5.288 percent.

Borrowing costs of domestic bonds due 2015 fell 21 basis points to 15.25 percent, according to the Financial Markets Dealers Association website.

Source:Businessdayonline

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Nigerian naira falls 12/03/2012

The Nigerian naira weakened against the US dollar on the interbank market on Monday, on strong demand by some banks filling their customers' needs for dollars, as dollar liquidity gradually dries up in the market, traders said.

The naira closed at 157.90 to the dollar compared with the 157.30 to the dollar on Friday.

Traders said the naira eased to 158.35 intraday before it finally settled at the 157.90 level, at the close of the market, on buying pressure from banks meeting their customers' demand for dollars.

A trader said the central bank was not meeting all demand for dollars at the auction, while more customers were resorting to the interbank to fill their needs.

The naira has performed well against the dollar since the start of the year, largely driven up by offshore investors into local debt instruments, which currently offer attractive yields.

“We expect that the naira will rebound this week as speculation is that there's an NNPC (state-owned energy company) plan to sell around $300 million to fill the market,” another dealer said.

At the bi-weekly auction, the central bank sold $150 million at 156.06 to the dollar, compared with $150 million sold at 156.01 to the dollar at the previous auction on Wednesday. - Reuters

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