Naira Picks Up After Two-Day Drop

Naira Picks Up After Two-Day Drop

The naira gained for the first time in three days after data from the Central Bank of Nigeria showed increase in the country’s foreign-currency reserves on Friday.

Naira Picks Up After Two-Day Drop

The currency of Africa’s biggest oil producer rallied as much as 0.3 per cent, the most since January 25, as the nation’s foreign-exchange reserves advanced to $46.15bn, the highest since July 2010, according to Bloomberg.

The increase to external reserves will provide a buffer against occasional demand pressures on the naira, which is likely to retain its present strength, analysts at the Lagos- based Financial Markets Dealers Association wrote in a report on its website.

The naira traded less than 0.1 per cent stronger at N157.25 per dollar as of 2:42 pm in Lagos, the commercial capital, giving a gain of less than 0.1 per cent last week.

The naira is being supported in part by portfolio inflows, the Central Bank Governor, Mr. Lamido Sanusi, said after the January 21 policy meeting, where the bank held benchmark interest rates at a record high of 12 per cent for an eighth straight time.

Nigeria’s bond yields have dropped to record low as JPMorgan Chase & Co, the world’s biggest underwriter of emerging-market debt, added the securities to its benchmark GBI-EM index in October. Barclays Plc is adding Nigerian debt to its local-currency government bond index next month.

One-year Treasury bill yields fell to the lowest in 16 months at an auction on February 6 as investor inflows pushed the subscription rate to a record.

The regulator sold N117bn ($744m) of 364-day bills at a yield of 10.6 per cent, the lowest since September 29, 2011 sale. Bids totalled N342bn, the highest on record.

The yield on the country’s 16.39 per cent domestic bonds due January 2022 declined seven basis points to 10.86 per cent in the secondary market, according to yesterday’s data compiled on the Financial Markets Dealers Association website.

Borrowing costs on Nigeria’s $500m of Eurobonds due January 2021 rose one basis point to 4.109 per cent today.

Ghana’s cedi gained less than 0.1 per cent to 1.9015 per dollar in Accra, the capital.


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