The naira depreciated to the lowest in two weeks as investors demanded dollars after the Central Bank of Nigeria sold the least foreign currency at auctions in more than a month.
The currency retreated 0.2 per cent to N158.40 per dollar, the weakest on an intraday basis since April 3, according to data compiled by Bloomberg.
The CBN sold $266.2m at an auction on Wednesday, bringing sales this week to $498.7m, the lowest since the period ending March 13, according to data on the website.
The regulator sells dollar at auctions on Mondays and Wednesdays to keep the naira within a three per cent band above or below N155 per dollar.
There was an “increased dollar demand to cover import bills,” Kunle Ezun and Kenneth Asenime, analysts at Ecobank Transnational Incorporated in Lagos, wrote in an e-mailed note to clients.
An analyst at Sterling Capital Limited, Mr. Sewa Wusu, said, dealers anticipated more dollars at the auctions.
Nigeria relies on imports to cover 70 per cent of its fuel needs because of inadequate refining capacity, and those shipments into the country are a source of pressure on the naira, according to the CBN.
Borrowing costs on the nation’s local-currency debt due January 2022 rose four basis points or 0.04 percentage point, to 11.05 per cent, according to prices compiled by the Financial Markets Dealers Association.
Yields on Nigeria’s $500m of Eurobonds due January 2021 were little changed at 4.01 per cent on Wednesday.
Ghana’s cedi weakened 0.2 per cent to 1.9485 per dollar in Accra, the capital.
The naira retreated on Tuesday, heading for its lowest level in two weeks, as importers were said to increase demand for dollars.
The currency declined by 0.2 per cent to N158.25 per dollar in Lagos.