Naira falls as forex trading ends

nairaThe naira yesterday, fell for a third day, reaching its lowest in a month, as seasonal dollar demand increased and the Central Bank of Nigeria (CBN) ended its foreign- currency auctions for the year.

The currency weakened 0.1 per cent to N158.05 per dollar, a close at this price would be its weakest since November 16. The naira has gained 2.7 per cent this year, the second-best performing currency in Africa, according to data compiled by Bloomberg.

There is high dollar demand due to seasonal, year-end imports and traveling, Jide Nwaogwugwu, a research analyst at Lagos-based Dunn Loren Merrifield Ltd., said. “There will be demand pressure while the CBN is not selling,” it said.

The CBN said last week it will end dollar sales to lenders at twice-weekly auctions and resume on January 7. The Abuja-based regulator sold $300 million today, the most since an August 8 sale, according to data compiled by Bloomberg.

Nigeria’s inflation rate rose for the second consecutive month in November to 12.3 per cent from 11.7 percent, the National Bureau of Statistics said December 17. The CBN left its benchmark interest rate unchanged at 12 per cent this year to control inflation and stabilise the naira.

Yields on 10-year naira debt were unchanged at 11.88 per cent, according to yesterday’s prices compiled on the Financial Markets Dealers Association website. Borrowing costs on the nation’s $500 million of Eurobonds due January 2021 fell one basis point to 4.13 per cent yesterday.

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