Nigerian Naira Hits Three-Month Low as Oil Import Demand Rises
The naira weakened to the lowest in more than three months, snapping two days of gains, after demand for dollars increased from oil importers and debt investors. The currency depreciated 0.3 percent to 159.25 per dollar, the lowest closing price since Feb. 14, as of 3:42 p.m. in Lagos. The naira has gained 1.9 percent this year.
Inflation accelerated to 12.9 percent in April, the fastest since October 2010, from 12.1 percent in March, after President Goodluck Jonathan partially reduced subsidies on gasoline in January. Nigeria is a fuel importer because of a lack of refining capacity.
Nigeria’s government is yet to implement recommendations, including the overhaul of the management and board of the state oil company Nigerian National Petroleum Corp. almost a month after a House of Representatives committee probe on possible fraud in fuel subsidy payments was completed. Payments totaling 2.6 trillion naira ($16 billion) in fuel subsidies were made in 2011 through a fraudulent process, the committee said. The naira weakened 0.7 percent last week, falling the most since Dec. 23.