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 as much as 0.2 per cent to N159.1 per dollar, the lowest since February 14 on a closing basis, before trading at N159 per dollar.
“The oil importers are getting comfortable and are increasing demand for dollars,” Jide Solanke, an analyst at First Securities Discount House Ltd., said by phone from Lagos yesterday. Investors in local debt are also exiting trades on concern over rising inflation, he said.
The federal government is yet to implement recommendations, including the overhaul of the management and board the Nigerian National Petroleum Corporation almost a month after a House of Representatives committee probe on possible fraud in fuel subsidy payments was completed. Payments totalling N2.6 trillion ($16 billion) in fuel subsidies were made in 2011 through a fraudulent process, the committee said in a report.
Inflation accelerated to 12.9 per cent in April, the fastest since October 2010, from 12.1 per cent in March, after President Goodluck Jonathan partially reduced subsidies on fuel in January.