Naira heads for second weekly fall

The naira fell for a third
day, headed for its second
weekly decline, on higher
dollar demand for gasoline
imports and as oil, the
country's key export,
retreated.
The currency of Africa's
largest oil producer weakened 0.1 percent to 161.65
per dollar as of 11 a.m. in Lagos, the commercial
capital, heading for a weekly fall of 0.3 percent.
Nigeria approved a tender on June 27 to import
3.135 million metric tons of gasoline in the third
quarter, the Petroleum Products Pricing and
Regulatory Agency said. Oil fell from a nine-week
high in New York, paring a second weekly advance,
as worse-than-expected economic data added to
signs seasonal crude demand is weakening.
The "naira has been under pressure this week from
oil importers that were granted official permits last
week," Tunde Ladipo, chief executive officer of
Lagos-based Valuechain Investment Ltd., which
trades currencies, said by phone today. "The
downturn in oil prices, reserves and rising inflation
remain a concern."
Nigeria relies on imports to meet 70 percent of its
fuel needs because of inadequate refining capacity,
Petroleum Minister Diezani Alison-Madueke said in
November. The central bank sold $500 million at its
foreign-currency auctions this week, after selling
$343.5 million the previous week, according to data
on the bank's website.
Reserves
The country's foreign-currency reserves have fallen
by $1.3 billion since the end of May to $36.379
billion, according to July 18 data compiled by the
Abuja-based central bank.
Nigerian benchmark Bonny Light crude, declined 0.6
percent today and traded at $108.05 a barrel from
$128.47 on March 13.
The central bank held the benchmark interest rate at
12 percent this year to curb the naira's decline and
combat inflation, after raising it 5.75 percentage
points last year. Inflation accelerated to 12.9
percent in June, from 12.7 percent in May, the
Abuja-based National Bureau of Statistics said July
18.
The yield on Nigeria's 7-year domestic bonds due
June 2019 rose 10 basis points to 16.36 percent,
according to July 19 data on the Financial Markets
Dealers Association website.
Yields on the nation's $500 million of Eurobonds due
2021 fell eight basis point to 5.427 percent today