Nigeria’s naira headed for a weekly retreat, after the central bank lowered its target range.
The currency of Africa’s biggest oil producer rose less than 0.1 per cent to 159.375 per dollar, as of 2:55 p.m. on the interbank market in Lagos, taking its weekly retreat to 0.5 per cent, according to data compiled by Bloomberg.
The Ghanaian cedi tumbled 0.6 per cent to 1.643 against the dollar, the lowest on record, as of 1:56 p.m. in Accra.
Nigeria’s central bank on November 21, 2011,? lowered the midpoint of its exchange rate band at its twice-weekly auctions to 155 naira per dollar from 150 naira, amid pressure from rising imports and concerns of weakening oil prices, the source of more than 95 per cent of Nigeria’s foreign-exchange income.
At a currency auction yesterday, Nigeria sold $250 million, compared with $411.6 million demanded by lenders, with the naira down by 0.6 per cent to 156.21 per dollar, its weakest since Oct. 12.
“The market and stakeholders are trying to adjust, to digest the information that the band was going to be moved from 150 to 155,” Adedayo Idowu, an analyst at Vetiva Capital Management Ltd. in Lagos, said by phone today. “There will be some kind of convergence” between the official auction rates and the freely moving interbank rates, Idowu added.
The cedi, down 1.7 per cent in the last five days, headed for its fifth consecutive weekly decline.