Nigerian naira falls further, devalued level faces test

Nigeria's naira fell 2.5 percent on Friday, despite central bank intervention, and it briefly touched a record low on concerns OPEC's decision not to cut oil output would put further pressure on Nigeria's shaky finances.
The central bank has struggled to keep the naira within its preferred band even after devaluing the currency by 8 percent on Tuesday in a bid to halt a slide in Nigeria's foreign reserves. Oil sales provide around 95 percent of those reserves.
The naira briefly touched a record low of 180.90, according to Thomson Reuters dealing data, before the bank intervened with dollar sales to lift it to 178.75 at the close, dealers said.
The bank's target band after devaluation is 5 percent plus or minus 168 to the dollar, but doubts remain about whether it went far enough given the bleak outlook for oil prices. The naira has consistently tested the lower end of the new band.
"The market is saying: 'We like what you're doing, but have you done enough?' Now the oil price is at $71 a barrel, all bets are off," Bismarck Rewane, economist and CEO of Lagos-based consultancy Finance Derivatives, said.
Foreign reserves in Africa's leading energy producer dropped 17.3 percent year-on-year to $36.9 billion by Nov. 26, according to central bank data released on Friday.
Falling world oil prices and a retreat from emerging markets have put pressure on the currencies of several oil exporters, including the Russian rouble and Angola's kwanza.
Brent crude fell more than $6 to $71.25 a barrel after OPEC ministers meeting in Vienna left the group's output ceiling unchanged despite huge global oversupply, marking a shift away from its long-standing policy of defending prices.
RAINY DAYS
In Nigeria, Saudi Arabia's decision on Thursday to block calls from poorer OPEC members to cut oil output came as a disappointment to many.
"Nigeria gets short end of the stick as OPEC fails to cut output," read the front page headline of local daily Business Day.
Oil prices have lost a third of their value since June and with OPEC's decision set to send them lower still, pressure on Nigeria's foreign currency reserves and the naira is set to increase.
"Many importers are bringing forward their obligations in view of the persistent fall in oil prices," one dealer said.
"A number of them ... anticipate a further depreciation of the naira, so they are stockpiling the dollar."
Pressure on the currency risks reigniting inflation, which has stabilised in single digits for two years, creating a headache for President Goodluck Jonathan who will seek a second term in elections in February.
Unlike Gulf countries, which have squirreled away large foreign currency reserves, Nigeria's oil savings fell during the boom times, partly owing to theft of its oil by criminal gangs, hurting output, and partly because too much money was spent by the government.
Finance Minister Ngozi Okonjo-Iweala admitted on Thursday that a significant portion of the billions of dollars drained from the oil savings account over the past two years was distributed to powerful governors instead of being saved for a "rainy day".
"The sun is not shining any more and there's not much left in the Excess Crude (oil savings) Account," Rewane said.
The country's fiscal problems are adding to challenges to stability posed by an Islamist insurgency raging in the northeast, seen as the country's biggest security threat.

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Nigeria's interbank lending rates ease to 12 pct on liquidity boost

Nigeria's interbank lending rates slipped on Friday by 800 basis points to around 12 percent for overnight placement, following the retirement of about 415 billion naira ($2.32 billion) in matured treasury bills.
The overnight placement rose to 20 percent from 15 percent on Wednesday, draining about 568 billion naira from the banking system. The increase went to meet a 500-basis-point hike in cash reserve requirements (CRR) for lenders.
The central bank raised the CRR on private-sector deposits at its monetary policy committee meeting on Tuesday. It also raised interest rates by 100 basis points, the first change in more than two years.
Dealers said the cash flow resulting from repayment of matured open market operations (OMO) bills late on Thursday boosted liquidity in the market and cut the cost of borrowing among banks.
"After the debiting of the CRR on private-sector deposits on Wednesday ... the central bank repaid around 415 billion naira in matured treasury bills, boosting liquidity in the banking system and supporting lending among banks," one dealer said.
The secured open buyback (OBB) closed at 12 percent versus 20 percent on Wednesday. That was 100 basis points lower than the new central bank benchmark interest rate, 13 percent.
The overnight placement also closed at 12 percent versus 20 percent on Wednesday, traders said, compared with 10 percent last Friday.
Dealers said interbank rates may rise next week after the purchase of treasury bills and foreign exchange at the central bank auction.

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Nigeria currency devaluation to curb banks' Eurobond bonanza

* Nigerian firms issued $5 billion hard currency bonds since 2007
* Banks' foreign currency exposure at $10 billion-analyst

 * Naira devaluation should not endanger repayments



Nigerian banks' overseas borrowing bonanza looks to be over in the wake of a dramatic currency devaluation this week, but while risks are rising, repaying existing debt should not be a problem for most.
Companies in Africa's largest economy have rushed in recent years to take advantage of rock-bottom global borrowing costs and investors' hunger for yield, selling some $5 billion in hard currency bonds since 2007, according to Thomson Reuters data.
Of this more than $2 billion was raised this year by financial institutions shoring up their balance sheets, Standard Chartered estimates.
But storm clouds have gathered over Africa's top oil producer. Sub-$80 oil prices due to stuttering global growth and an ever strengthening greenback have weighed on the naira for weeks, finally forcing the central bank to devalue it by 8 percent on Tuesday.
The currency's woes have raised some fear about the impact on the balance sheets of companies and banks and have been reflected in some of Nigeria's top banks' Eurobonds.
First Bank Holdings 7-year Eurobond issued in June traded at 97.27 after hitting a record low of 96.85 on Monday. Meanwhile Access Bank's 7-year Eurobond issued the same month traded at a record low of 97.89
Both had traded above face value of 100 almost until mid-October.
Samir Gadio, Standard Chartered's Head of Africa Strategy FICC Research estimates Nigerian banks' total foreign currency exposure tallied up to as much as $10 billion when adding syndicated loans and currency swaps to the $3.6 billion total outstanding in Eurobonds.
"This makes me look at Nigeria's vulnerability from a whole new angle," he said.
"The transparency and supervision of the foreign currency exposure of the banks needs to improve, because there is a risk that has been overlooked but that will come to the fore in the future."
Ratings agency Fitch also pointed to the naira devaluation potentially spelling trouble for firms' ability to service the foreign currency debt they owed Nigerian lenders, with a knock-on effect on banks' asset quality.
"Inflationary pressures from the devaluation could also affect consumer disposable income and banks' retail loans," Fitch said in a note published on Thursday
Yet few doubt the banks' ability to repay the debt.
Richard Segal, emerging markets analyst at Jefferies, noted that Nigerian bank debt had performed far worse than the sovereign as the naira weakened but he added:
"Neither the ability to pay of the banks, nor the capacity of the government to support them, has declined significantly."
One reason is that many Nigerian banks lend in foreign currency, predominantly U.S. dollars, to major companies active in the dominant oil, gas and power sectors.
This has boosted banks' assets and loans denominated in currencies other than naira.
"A lot of the balance sheets of these Nigerian banks are already dollarised," said Kato Mukuru, head of equities research at brokerage Exotix.
This offers comfort on the repayment side, he added.
One thing is for sure: abundant Nigerian Eurobond issuance is unlikely to continue in the same volume as before. The central bank this week also imposed tighter restrictions on banks' foreign currency borrowing.
"It is not the same environment...the whole issuance of the eurobond is likely to recede," Standard Chartered's Gadio said.


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Nigeria naira down 1.7 pct on OPEC decision not to cut output - dealers

Nigeria's naira fell 1.7 percent in early Friday trade to 177.25 against the dollar as markets reacted negatively to a decision of the OPEC oil exporting group not to cut crude output, dealers said.
Saudi Arabia blocked calls on Thursday from poorer members of OPEC, including Nigeria, to cut output, sending oil prices plunging.
Nigeria's currency touched a record low against the dollar on Wednesday, a day after the central bank devalued it by 8 percent in a bid to halt a slide in its foreign reserves -- 95 percent of which derive from oil sales.
Falling world oil prices and a retreat from emerging markets have put pressure on the currencies of several oil exporters, including Angola, whose kwanza is also in retreat.
Brent crude fell more than $6 to $71.25 a barrel after OPEC ministers meeting in Vienna left the group's output ceiling unchanged despite huge global oversupply, marking a shift away from its long-standing policy of defending prices.
Unlike the Gulf countries, which have squirreled away large foreign currency reserves, Nigeria's oil savings fell during the boom times, partly owing to theft of its oil by criminal gangs hurting output and partly because too much money was distributed to its powerful governors.
The falling oil price has created expectations of further declines which would put further strain on the central bank's currency reserves, weighing on the naira.
"Many importers are bringing forward their obligations in view of the persistent fall in oil prices," one dealer said.
"A number of them ... anticipate a further depreciation of the naira, so they are stock piling the dollar."
The troubles facing Africa's biggest economy are an unwelcome headache for President Goodluck Jonathan, who will seek a second elected term in polls scheduled for Feb. 2015.

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Saudi, UAE signal no push for OPEC oil cut

OPEC leader Saudi Arabia and fellow member the United Arab Emirates signalled on Wednesday they were unlikely to push for a major change in oil output at the group's meeting this week to prop up prices that have collapsed by a third since June.
Saudi Oil Minister Ali al-Naimi said he expected the oil market "to stabilise itself eventually" after talks with non-OPEC member Russia on Tuesday yielded no pledge from Moscow to tackle a global oil glut jointly.
OPEC's meeting on Thursday will be one of its most crucial in recent years, with oil having tumbled to below $79 per barrel due to the U.S. shale boom and slower economic growth in China and Europe.
Core Gulf oil producer the UAE sided with Naimi, saying oil prices would soon stabilise, while ramping up pressure on non-OPEC producers.
"This is not a crisis that requires us to panic ... we have seen (prices) way lower," UAE Oil Minister Suhail bin Mohammed al-Mazroui told Reuters. "I think everyone needs to play a role in balancing the market, not OPEC unilaterally".
Iranian Oil Minister Bijan Zangeneh said some OPEC members, although not Iran itself, were now gearing up for a battle over market share and also insisted that non-OPEC producers needed to participate in any OPEC-led output cut.
"Some OPEC members believe that this is the time where we need to defend market share ... All the experts in the market believe we have oversupply in the market and next year we will have more oversupply," he added.
Cutting output unilaterally would effectively mean for OPEC, which accounts for a third of global oil output, a further loss of market share to North American shale oil producers.
If OPEC decided against cutting and rolled over existing output levels on Thursday, that would effectively mean a price war that the Saudis and other Gulf producers could withstand due to their large foreign-exchange reserves. Other members, such as Venezuela, would find it much more difficult.
Among the 12 members of the Organization of the Petroleum Exporting Countries, Venezuela and Iraq have called for output cuts. Naimi has not commented on what the group should do.
"The onslaught of North American shale oil has drastically undermined OPEC’s position and reduced its market share," said Dr. Gary Ross, chief executive of PIRA Energy Group. Brent crude was trading flat at 1320 GMT, above $78 per barrel.
RUSSIA SCEPTICAL ON OPEC CUT
Russia, which produces 10.5 million barrels per day (bpd) or 11 percent of global oil, came to Tuesday's meeting amid hints it might agree to cut output as it suffers from oil's price fall and Western sanctions over Ukraine.
But as that meeting with Naimi and officials from Venezuela and non-OPEC member Mexico ended, Russia's most influential oil official, state firm Rosneft's  head Igor Sechin, emerged with a surprise message - Russia will not reduce output even if oil falls to $60 per barrel.
Sechin added that he expected low oil prices to do more damage to producing nations with higher costs, in a clear reference to the U.S. shale boom.
Many at OPEC were taken by surprise by Sechin's suggestion that Russia - in desperate need of oil prices above $100 per barrel to balance its budget - was ready for a price war.
"Gulf states are less bothered about a price drop compared to other OPEC members," an OPEC source close to Gulf thinking said.
On Wednesday, Russian Energy Minister Alexander Novak said the country's energy companies would produce around the same amount of oil next year as they did in 2014.
He told reporters in Moscow he was sceptical that OPEC would decide on Thursday to cut output quotas.
OPEC's own publications have shown in recent months that global supply will exceed demand by more than 1 million bpd in the first half of next year.
While the statistics speak in favour of a cut, the build-up to the OPEC meeting has seen one of the most heated debates in years about the next policy step for the group.
An OPEC delegate from one of the smaller oil producers suggested on Wednesday that the group's meeting could be prolonged.
"They must agree, even if they have to stay here for two days. It is a matter of death or survival for budgets," the delegate said.
"It might take a bit longer than the ordinary meetings."

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Nigeria c.bank to drain 568 bln naira from bank accounts, banks scramble for funds

Nigeria's central bank on Wednesday advised banks it would drain a combined 568 billion Nigerian naira ($43 billion) from their accounts to meet the 500 basis-point hike in cash reserve requirements on private sector deposits with lenders.
The planned withdrawal triggered a scramble for funds in the interbank lending market, where the cost of borrowing among banks almost doubled, dealers said.
The overnight interbank borrowing rate closed at 20 percent on Wednesday compared with 10.25 percent on Tuesday.
The bank central bank hiked the CRR on private sector deposits to 20 percent from 15 percent previously at its monetary policy committee meeting on Tuesday. It also raised interest rates by 100 basis points, the first change in more than two years.

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Nigeria overnight lending rate doubles to 20 pct after cbank action

Trading on Nigeria's almost doubled on Wednesday, after trading resumed a day after the central bank hiked the cash reserve ratio (CRR) for commercial banks to hold deposits from individuals and businesses, dealers said.
Dealers said commercial lenders were scrambling for cash in anticipation of the central bank enforcing the CRR on Wednesday, so interbank rates rose sharply from 10.25 percent the previous day.
Initially, the overnight market was not giving quotes on Wednesday because they were waiting for information from the central bank on when the CRR will be debited.

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Nigeria's Access Bank sees 'little' impact from naira devaluation

• Nigeria devalued currency by 8 pct this week

• Devaluation likely to hit demand for bank's rights issue

Nigeria's Access Bank does not expect the naira's devaluation to have a significant impact on its business as most of its dollar facilities have been loaned to clients generating foreign currencies, its chief executive said on Wednesday.
Nigeria's central bank devalued the naira by 8 percent and raised interest rates by 100 basis points on Tuesday, hoping to stem losses to its foreign reserves from defending the currency against weaker oil prices.
"It is little or nothing in terms of the implications to my financials just because of where my lending is," Chief Executive Herbert Wigwe told Reuters in an interview in Johannesburg.
Access Bank raised $400 million in Eurobonds earlier this year.
Domestic rates are likely to rise by 200 basis points and hurt lending to the manufacturing and trade business sectors, he said.
The naira devaluation will probably dampen foreign investor demand for Access Bank’s 68 billion naira ($385 million) rights issue as well, Wigwe said. He added that falling oil prices would hurt appetite for the issue too.
Local investors are expected to plug any hole and the bank still anticipates raising an “acceptable portion” of it.
Wigwe said the bank had also been cleared of any wrongdoing after a Securities and Exchange Commission investigation into the freezing of Access Bank’s share price in September.
The Nigerian Stock Exchange suspended the shares for a week after Access Bank applied to the bourse arguing that information on its capital raising was not publicly available and that it wanted to avoid speculations in its shares.

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Nigeria cenbank lowers naira band, raises interest rate by 100 bps

Nigeria's central bank lowered the target band for the naira on Tuesday, and it raised interest rates by 100 basis points to 13 percent, as it sought to stem losses to its foreign reserves from defending the local currency.
The central bank moved the band to 160-176 naira to the U.S. dollar, compared with 150-160 naira previously, owing to prolonged naira weakness and high dollar demand.
The naira has taken a beating over the past few months, as falling oil prices have shaken confidence in the assets of Africa's leading energy producer.
Defending the move, the bank's Governor Godwin Emefiele said efforts to defend naira had led to "dwindling foreign reserves" and that a "more flexible exchange rate is the most viable option".
In a further tightening move, the bank hiked the cash reserve ratio for private sector bank deposits to 20 percent, from 15 percent previously.

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Nigeria central bank breaches its forex band ahead of rate meeting

Nigeria's central bank sold dollars outside its preferred currency band at its forex auction on Monday, signalling it could shift the band to weaken the naira after its policy meeting on Tuesday, dealers said.
The central bank usually sells dollars at its twice weekly forex auctions at 150-160 naira, a band it adopted in November 2011 after a decline in oil prices forced it to spend billions of dollars in reserves to defend the naira.
A slump in oil prices this year has pushed the naira down 10 percent versus the dollar. On Monday the Nigerian currency hit a record low at the interbank window on concerns that a continuous slide in global oil prices could undermine the central bank's efforts to keep defending the currency, dealers said.
At its forex auction on Monday the central bank sold $198.87 million at 162.50 naira. It was the second time in a row it has auctioned the dollar outside its band. At previous auctions it had sold up to $400 million at 158.41 to the dollar, dealers said.
"With regards to a devaluation, we think the central bank's guidance has not matched its actions. We think the fact that the bank allowed for the official exchange rate to breach the upper band of the target range signals a devaluation," Yvonne Mhango, economist at Renaissance Capital said.
The price of crude oil, Nigeria's main export, has fallen almost 30 percent since July, compounding worries about the government's finances and political stability given an Islamist insurgency mostly in the northeast and tensions before elections early next year.
The central bank is widely expected to keep interest rates on hold at the end of a two-day meeting on Tuesday despite some pressure for an increase to support the naira.
It has vowed to defend the currency in the past, despite the drop in oil prices which has unnerved foreign investors and sent Nigeria's stock and bond markets into a tailspin.
Even though the bank has spent billions of dollars from its reserves to prop up the naira this year, the currency fell 1.58 percent from its previous close against the dollar to 176.35 naira on Tuesday.
According to figures on the central bank's website, the bank has spent an average of $27.9 million a day this year defending the naira, which has tracked falls in other emerging market currencies - notably those in economies that are particularly sensitive to changes in the oil price, such as the Russian rouble.
As of Nov. 20, the central bank's liquid reserves had fallen by $6.2 billion, or 14.7 percent, this year to $36.2 billion, the figures show.
Analysts also expect the bank, at the end of Tuesday's meeting, to tighten liquidity by hiking banks' cash reserve ratio for private sector deposits to between 18 percent and 20 percent, from 15 percent.

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Nigeria's overnight lending rate halves to 9.75 percent

Nigeria's overnight lending rate fell to 9.75 percent on Friday, from 18 percent at the previous close, after government monthly budget disbursals flowed into the banking system, dealers said.

Liquidity had dried up after pension funds snapped up bonds before an expected central bank ruling on naira cash reserve ratios on Tuesday that it hopes will tighten liquidity to support the currency. The naira has lost 10.5 percent this year.

It has been under particular pressure in the past two months as falling oil prices sapped appetites for assets in Africa's No. 1 economy and chief oil exporter.

Dealers said the government disbursed about 200 billion naira ($1 billion) in allocations on Friday, which increased liquidity and lowered what it costs banks to borrow.

The central bank did not disclose lenders' cash balances on Friday, dealers said, citing a highly liquid banking system.

The Open Buy Back rate eased to 9.5 percent, from 10.75 percent last week, 2.5 percentage point below the central bank's 12 percent benchmark rate.

Overnight placements traded lower at 10 percent, down 100 basis points compared with 11 percent last week.

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Nigeria's bond eyes rate setting policy meeting

Nigeria's debt market is expected to take its next direction from the outcome of the central bank's rate-setting Monetary Committee meeting scheduled for early next week.
    Traders said they were cautious since the committee could take measures to support the flagging local currency, including a possible hike in cash reserves requirements.
    The committee will meet for two days from Nov. 24, against the backdrop of a steep drop in the price of crude oil that has put significant pressure on the naira currency.
    Yields on Nigerian government bonds rose around 50 basis points across all maturities week-on-week, but some local pension funds were seen taking positions in the market on Friday after yields fell from around 14 percent mid-week.
    "We are expected to trade cautiously, waiting to see the outcome of the rate setting meeting of the MPC next week," one dealer said.
    The benchmark 10-year bond rose 52 basis points to 13.70 percent on Friday from 13.18 percent last week, the 2022 was trading around 13.56 percent against 13.23 percent, while 2016 paper was at 13.68 percent versus 13 percent a week earlier.
    The naira has lost 11.42 percent year-to-date on concerns over falling oil prices and exiting of the local debt by offshore investors.

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Nigeria to lower oil benchmark for budget as crude falls

• Nigeria to revise oil benchmark lower to $73 per barrel
• Oil price fall will impact revenues, expenditure - Fin Min
• Minister rejects calls to print more naira

 Nigeria plans to lower its assumed benchmark oil price for next year's budget by $5 per barrel to $73 and use reserves to meet ongoing government spending, its finance minister said on Sunday.
Ngozi Okonjo-Iweala said a six percent drop in oil revenues following a world crude price decline would require the government to cut non-essential spending and raise more revenue.
She said the revised medium-term expenditure plan, which is used in preparing the budget and must be approved by lawmakers, would keep the 2015 oil production projection at 2.27 million barrels per day, down from 2.38 million in 2014.
"We think that for now, let us bring the benchmark price down to $73 then have a series of additional measures so that at each price it falls to, we would be able to kick in appropriate measures to keep this economy going," Okonjo-Iweala told reporters.
A lower assumed oil price means a tighter budget in 2015, though this is unexpected given it will be an election year, when politicians' demands for funds tend to surge. President Goodluck Jonathan faces a presidential poll in February.
Brent crude, the benchmark against which Nigeria's oil is measured, has fallen more than 30 percent since July. Nigeria depends on crude exports for more than 70 percent of government revenues.
The fall has triggered a selloff in Nigeria bond and stock markets, hurting the naira which is down almost 8 percent this year despite the central bank spending billions of dollars to defend it.
Okonjo-Iweala projected 2015 expenditure of 4.66 trillion naira, down 2.92 percent from 2014, on revenues of 6.83 trillion naira, lower than the 7.287 trillion initially pencilled in.
She rejected calls she said were coming from parts of government to print more naira: "Printing money without adequate revenue support will lead to serious consequences for the country. It will spur inflation."
In the past, lawmakers have tended to inflate the assumed oil price if they believe it is too low as they want excess cash to feed extensive political patronage networks, analysts say. But given oil prices are falling they might refrain this time.
However, the oil savings Excess Crude Account (ECA) is prone to being raided. Okonjo-Iweala said the government will tap about half of its $4.11 billion ECA, which has declined from $11.5 billion at the start of 2013, to meet current obligations.
She said Nigeria still had funds to pay salaries and keep debt obligations but with crude likely to fall the government would increase taxes on luxury items and ban non-essential government travel to cut expenditure.

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Nigerian interbank rate up 287 bps as cbank supports naira

Nigeria's overnight interbank lending rate jumped 287 basis points to 10.87 percent on Friday as the central bank mopped up liquidity via treasury bill sales to ward off pressure on the naira, dealers said.
The naira currency has come under pressure over the past two months from falling global oil prices, dampening appetite for assets in Africa's biggest economy and chief oil exporter.
Though the central bank has been intervening this year to prop up its value, the naira has lost 7.2 percent since Jan. 2.
The bank sold more than 200 billion naira ($1.17 bln) of open market bills through the week, curbing liquidity in the market, to drive up interbank rates.
The cash balance that lenders held at the central bank opened at around 190 billion naira ($1.13 billion) in credit on Friday, down from about 500 billion naira last Friday.
"The central bank is desperately trying to stem the naira weakness and is doing everything it can ... including mopping up cash from the system," one dealer said.
Overnight rates fell to 8 percent last week after the central bank limited the volume of idle cash lenders can deposit with it, increasing market liquidity.
The Open Buy Back (OBB) climbed to 10.75 percent on Friday, compared with 8 percent last week, 1.25 percentage point below the central bank's 12 percent benchmark rate. Overnight placements traded higher at 11 percent against 8 percent last week.
Dealers expect the overnight interbank rate to increase further early next week as lenders pay for bond purchases of around 59 billion naira, but it could moderate towards the end of the week as the government revenue distribution for October hits the market.

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Nigeria's naira trading outside cbank's band despite interventions.

Nigeria's naira firmed 0.88 percent on Friday, after the central bank stepped up dollar sales to try to support the currency, under pressure as the price of oil, the country's main revenue earner tumbled to a four-year low.
Howevrr, although the central bank has spent billions of dollars this week in interventions, the naira is still worth 2.7 percent less against the dollar than when the week started and remains outside the bank's preferred trading band.
In the latest session, the unit had initially weakened to 173.77 naira against the greenback, as oil prices plunged and foreign investors exited domestic financial markets.O/R
Yields on the government's three-year paper jumped 52 basis points to 13 percent on Friday while the stock market, which had shed almost 1 percent, reversed earlier losses. Its biggest listed company, Dangote Cement, which accounts for a third of the index, climbed 10 percent for the second day.
The central bank, which has sold the U.S. dollar directly onto the interbank forex market during the past week, stepped up its dollar sale on Friday, asking 21 commercial lenders to bid for $3 million each in a move to prop the local currency.
It had sold $2 million each in earlier interventions.
But even after five interventions this week, the currency closed at 171.10 on Friday, firmer than Thursday's close of 172.60 but outside its preferred band of 150-160 naira, which it burst of it in May. The bank has said it still wants to keep the trading band.
Figures on the bank's web site show liquid reserves had declined by $5.77 billion or 15.7 percent this year to $36.69 billion by Nov. 11, from $42.46 billion at the start of the year. That is about $26.6 million a day.
The naira has lost 7.2 percent so far this year.

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Nigeria stocks rise for third day as local funds buy shares

Nigeria's index rose for the third straight session after a 12-day sell-off, as domestic investors snapped up relatively cheaper consumer and oil and gas stocks dumped by foreign funds, stockbrokers said on Wednesday.
Foreign investors, who dominate trades on the Nigerian bourse, have been pulling money out after the price of oil collapsed and the naira currency weakened.
Brokers said the sell-off drove stocks to new lows, which spurred buying interest from local pension and retail investors.
The all-share index had climbed 0.84 percent to 33,951 points at 1124 GMT. The index shed 11.5 percent last week and is down 18.5 percent so far this year.
"We've seen a rebound in all the sectors apart from cement," said Akintola Akinbamidele of Renaissance Capital.
"On Friday we saw the central bank aggressively push the exchange rate into a comfortable range, reiterating its commitment to keeping the naira stable. This brought about renewed interest in the market."
Nigeria's central bank has vowed to defend the currency despite a drop in oil prices that has unnerved foreign investors and sent local financial markets into a tailspin.
"We are seeing some recovery as local investors ... take advantage of the low prices to increase their holdings," Yusuf Rasheed, a stockbroker told Reuters.
Nigeria's index of top 10 consumer goods stocks was up 1.81 percent, while the oil and gas stocks climbed 3.97 percent.
Top gainers included conglomerate Transcorp Cussons, Cadbury and Oando, which were each 10 percent higher, the maximum daily limit.
But Dangote Cement, which accounts for around a third of total stock market capitalisation, bucked the trend, shedding 0.25 percent after it cut cement prices and sending its shares to an 18-month low of 169.74 naira.

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Nigeria consumer inflation eases to 8.1 percent y/y in Oct

• Inflation dips in Oct on lower food prices
• CPI still within cbank target band of 6 to 9 percent
• Nigeria attracted $6.5 billion in foreign investments in Q3

 Nigeria's consumer price inflation eased for the second consecutive month to 8.1 percent in October, from 8.3 percent the previous month, driven by lower food prices, the statistics bureau said on Sunday.
Food prices, the biggest contributor to headline inflation, declined to 9.3 percent last month, down from 9.7 percent in the previous month.
"In October, the pace of increase in food prices eased for the second consecutive month … representing the lowest price increase since March, 2014. The highest price increases were recorded in the coffee, tea and cocoa; fish, dairy, and fruit groups," the bureau of statistics said in a statement.
Consumer inflation in Africa's largest economy and top oil exporter rose from 8 percent in May, creeping up from a five-year low of 7.8 percent last October as food prices rose. The central bank has said it wants to maintain inflation within a target of between 6 to 9 percent.
Analysts welcomed the drop in inflation, and said the bank will take it into account at the next monetary policy meeting in two week time, with a focus on the weakening naira currency, which has lost 6.4 percent so far this year, pressured by the decline in global oil prices.
The statistics office said Nigeria attracted $6.5 billion in foreign investments in the third quarter, up 48.1 percent from a year ago, with more than half of inflows going into the stock market.
"Equity remained the largest contributor to capital imported in the portfolio investment sector, with a value of $3.77 billion. It represented 57.6 percent of all capital imported in the quarter," the statistics office said in its report.
Nigeria’s main stock index shed 11.5 percent in one week to 33,225 points on Friday as pressure on the local naira currency persisted owing to the decline in the oil price, unnerving foreign investors, the major buyers of local shares.

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Nigerian stocks, bonds slide as foreign investors exit

Nigeria's main stock index fell 11.52 percent in one week to 33,225 points as naira worries and oil price risk unnerved foreign investors, the major buyers of local shares.
Yield on Nigeria's 3-year bond fell 64 basis points on Friday as local pension funds snapped up debt from exiting foreign investors.
Foreign investors, who dominate stock and bond trades in Nigeria, have continued to pulled money out of the country's financial markets after the oil price, which had dropped to a new four-year low below $82 a barrel on Wednesday, steadied around $83 a barrel.

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Higher liquidity to spur demand for Nigerian bonds

Increased money market liquidity after the central bank capped the amount of idle cash that banks can deposit with the regulator will drive demand for bonds by local investors, helping to offset a sell-off by foreign funds.
Nigerian assets have taken a beating in recent weeks on the back of a drop in the price of crude oil.
In a bid to force banks to lend to the productive sector and stimulate economic growth, Nigeria's central bank restricted lenders and discount houses from placing more than 7.5 billion naira each as deposits with the regulator.
This has raised the level of liquidity in the banking system and buoyed demand for local debt by local pension funds and other assets managers.
Nigeria plans to raise 65 billion naira ($392 million) through bonds with maturities of three to 20 years at an auction on Nov. 12.
"We are expecting strong demand at the bond auction next week, with subsequent drop in yields across the board," one dealer said.
Dealers said banks are expected to increase their position in the short-dated instruments, while pension funds are seen buying more of the long-term debt.
Yields fell at the secondary bond market on Thursday after the central bank announced its restriction on volume of deposits banks could place with it.
Yields on the bench-mark bond 2014 however closed at 12.69 percent compared with 12.56 percent last week.

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Nigerian interbank rates at three-year low on new central bank rules

Nigeria's interbank lending rates slipped to a three-year low after the central bank announced a restriction on the volume of idle cash that banks can place with it, traders said.
The central bank on Thursday restricted lenders and discount houses from depositing more than 7.5 billion naira ($45.25 million) each, increasing interbank naira liquidity.
Interbank lending rates closed around 8 percent across the board on Friday, 2.2 percentage points lower than last week's 10.2 percent.
Dealers said many banks were taken aback by the new limit on central bank deposits and were willing to place funds with borrowers at whatever rate.
"Many banks are left with idle funds that should ordinarily be attracting some interest at the central bank, but now are floating with zero interest," one dealer said
The cash balance banks held at the central bank opened around 500 billion naira on Friday. The new restrictions meant more than 60 percent of those funds were not earning interest.
Any amount deposited above the stipulated 7.5 billion naira by each bank will not attract any interest payment, the new rule specified. The regulator currently pays on 10 percent of cash deposited with it by banks.
Both Open Buy Back (OBB) and overnight placement with other banks were traded around 8 percent each on Friday, lower than 10.15 percent and 10.25 percent for OBB and overnight last week.
Dealers said interbank lending rates are expected to rise back to around 10 percent next week as banks adjust their lending to the new central bank rule.

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Nigerian naira gains 2.3 pct as central bank sells dollars

Nigeria's naira rose 2.35 percent against the U.S. dollar on Friday after the central bank sold dollars to prop up the value of the local currency.
The naira closed at 165.90 to the dollar compared with 169.90 to the dollar the previous day.
The naira had touched new intraday lows of 173.02 on Friday amid demand for dollars, partly from foreign investors unnerved by falling oil prices exiting Nigeria and partly from domestic importers worried about the risk of a currency devaluation.
Dealers said the central bank sold undisclosed amount of dollars.
"We saw the central bank increased its dollar sales at the interbank market today to counter surging demand and reassure the market of its intention to continue to defend the naira," one dealer said.
Traders said the dollar sales by the central bank coupled with flows from state-owned energy company NNPC on Thursday further strengthened the local currency.
The central bank on Thursday restricted the sale of dollars to importers of telecoms equipment, power generators and finished products at its foreign exchange auction, funnelling demand towards the interbank market.

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Africa's richest man targets Nigeria's rice deficit

Nigeria enjoys a perfect rice-growing climate over a vast area yet it is the world's second biggest importer of the staple, often from countries in its warm, wet tropical latitude like top exporter Thailand.
It's one of those baffling Nigerian paradoxes, like the fact that it is Africa's top oil producer yet suffers frequent fuel shortages; or that it is sitting on the world's eighth largest gas reserves but can only produce a few hours of power a day.
As with the other bottlenecks holding back Africa's biggest economy, decades of bad governance and corruption lie at the root of Nigeria's agricultural dysfunction.
But unlike oil, where reform remains deadlocked by vested interests, the government is making serious efforts to clean up the farming sector and attract investment.
Africa's richest man Aliko Dangote thinks he can resolve the rice conundrum. He plans to do this by investing in farmland and mechanising farming practices in a country where many farmers still depend on pre-industrial tilling techniques.
Given his track record in other areas, this is a project to watch.
GET LAND, ADD WATER AND SOW
"Everything you need for rice is here, but unfortunately for a long time no one was interested," he told Reuters in a telephone interview. Not having enough land was the first obstacle that faced him after he thought of the idea.
He was surprised at how easily that got solved, as the governments of Jigawa, Niger, Kebbi, Edo and Kwara states between them offered 50,000 hectares to Dangote Industries.
"I think this is enough for us to grow and process up to a million tonnes of rice in the next four years," he says. "I believe this is just the beginning."
To back up his optimism, he points to his past success in producing cement.
Dangote grew his company over a decade from a relatively small cement import business to a behemoth that manufactures nearly 30 million tonnes of the stuff a year, makes up a third of Nigeria's stock exchange and now has factories in various stages of completion across the continent.
For decades Nigeria was one of the world's biggest cement importers. "We (Nigeria) were producing less than 2 million tonnes of cement," in 2004, the tycoon says.
Ten years later and Nigeria as a whole now produces some 40 million tonnes a year, said Dangote, whose cement empire worth an estimated $20 billion has earned him the label "richest black person on the planet" from Forbes magazine.
This month, Dangote Cement even had to cut prices to make up for falling sales amid oversupply.
Like cement, demand for rice among Nigeria's 170 million population is huge, so he won't need to think about export. Dangote estimates the current rice deficit at 2 1/2 million tonnes a year.
Nigerians eat rice in outsized portions and no party is complete without mountains of bright orange "jollof" rice -- a West African style of cooking the grains in tomato paste, onions and fiery peppers. Parboiled, not white rice, is favoured.
GOVERNMENT SUPPORT
President Goodluck Jonathan made local production of rice a signature promise before he was elected in 2011. His government has an ambitious target to import zero rice by the end of 2015, using incentives for farmers like free fertiliser and tax breaks for investors. Jonathan will seek another term in February.
Agriculture Minister Akinwumi Adesina has cleaned up corruption in government handouts of imported fertiliser, which have been hampered by fraud and an inefficient supply chain stretching from the port to the remote villages where it ends up. That was a major obstacle to development of the sector.
Dangote says his own factories will soon be producing more fertiliser than Nigeria could ever need -- 2.8 million tonnes a year -- which would cut out the need for imports altogether.
His plans for a 400,000 barrel-per-day oil refinery and petrochemical plant remain on track, he added.
Rice smugglers from neighbouring Benin, Niger and Cameroon are the biggest threat to his business model, Dangote complains, but it still stands to be highly profitable.
But with a reputation as a ruthless monopolist, with interests in everything from food milling to petrochemicals and a personal fortune equal to 4 percent of Nigeria's GDP, is Dangote not getting too big? He expects some will say that.
"People not investing will raise their hands and say 'he's got a monopoly in rice'," he says. "Everyone has an opportunity. If other people don't invest, why is that my fault?

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Nigerian markets fall, central bank intervenes as weak oil price pressures naira

• Foreign investors exit Nigeria assets on naira concerns
• Main stock index down 1.6 pct at 36,744 points
• Stocks down 9.6 pct this year as investors exit
• Naira down 4.3 pct in 2014, unnerved by falling oil price


  Nigeria's main share index hit a 13-month low and government bonds fell on Tuesday as foreign investors pulled out of Nigerian assets, prompting the central bank to sell dollars to support the ailing naira.
    Nigeria's currency has come under pressure in the past two months from falling global oil prices, dampening appetite for assets in Africa's biggest economy and chief oil exporter.
    Though the central bank has been intervening this year to prop up its value, the naira has lost 4.3 percent since Jan. 2.
    Foreign investors pulled more money out of the stock market on Tuesday, mainly in the relatively liquid banking and cement sectors, as the oil price fell 3 percent to a four-year low of just above $82 a barrel and as Nigerian companies reported mixed results.
    Nigeria's main share index closed down 1.6 percent at 36,744 points, a level last seen on Oct. 7, 2013.     The index has now fallen 11 percent in the past month, although it picked up briefly last week.
    The naira, which had earlier lost 0.3 percent intraday against the U.S. currency as funds repatriated cash, recovered some ground after the central bank intervened to close down 0.1 percent at 165.90 to the dollar, dealers said.
    "Stocks failed to sustain the recovery recorded in the previous week ... as companies posted mixed performance in the third quarter," one stockbroker told Reuters.
    Dangote Cement, sub-Saharan Africa's leading cement producer and majority owned by billionaire Aliko Dangote, reported just a 1.5 percent rise in pretax profit in the nine months to September.
    Shares in Dangote Cement, which accounts for a third of the stock market's total capitalisation and whose outlook is linked to the overall state of the economy, dropped 1.7 percent, dragging down the index.
    Concerns about the naira amid falling global oil prices also triggered a drop in bond prices as investors demand higher returns to hold Nigerian bonds.
    The yield on the benchmark 10-year bond rose 7 basis point to 12.70 percent on Tuesday, dealers said.
    Two dealers told Reuters that the interbank currency market had seen strong demand for dollars amid tight supply from offshore investors selling assets and repatriating funds.
    The local unit of Italian oil firm Eni sold $25 million alongside the central bank to support the naira.
    Nigeria's stock market rose 47 percent last year, vastly outperforming emerging market peers which were down on average 4.9 percent.
    But this year Nigeria's stock index is down 9.6 percent.
    Other top decliners on Tuesday included cement giant Lafarge Africa and its listed local subsidiary Ashaka Cement, whose shares both dropped 5 percent.

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Oil hits four-year low near $82 after Saudi Arabia cuts U.S. prices

Brent crude oil fell to a more than four-year low near $82 a barrel on Tuesday, after top oil exporter Saudi Arabia cut sales prices to the United States.
    Front-month Brent crude touched a low of $82.08, its weakest since October 2010, and was down $2.10 at $82.68 a barrel by 1030 GMT.
    U.S. light crude <CLc1> was down $2.20 at $76.58 a barrel. It touched a session low of $75.84, its weakest since October 2011, as its discount to Brent hovered around $6.
    The Brent price plunged more than 50 cents below last month's low of $82.60 before recovering.
    "We've been seeing some technical stop loss selling because the price has reached new lows," said Christopher Bellew, a broker at Jefferies in London.
    The world's top exporter increased its December sales prices, relative to benchmarks, to Asia and Europe on Monday, but lowered prices to the United States, a smaller export market.
    "This is mixed news, and the fact that the positive angle has not made an impact shows that market sentiment is very negative at the moment," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.
    Daniel Ang of Phillip Futures said in a note that the move "signalled Saudi Arabia's intention to fight for U.S. market share and could even show its intention to squeeze U.S. shale producers".
    But analysts at JBC Energy wrote that the pricing reflected market fundamentals and did not have a political motive.
    "We would strongly advocate against interpreting every month's OSP publication in the context of 'price war' and 'market share battle' stories," they said in a note.
    The absence of signs that the Organization of the Petroleum Exporting Countries (OPEC) could curb output in a well supplied market also continued to weigh on sentiment.
    The oil cartel will meet on Nov. 27 in Vienna to discuss its output targets for next year.
    Members Venezuela and Ecuador are working on a joint proposal to defend oil prices, but the United Arab Emirates oil minister said the group is "not panicking."
    OPEC's secretary general last week said production next year would not vary much from 2014, and members Iran and Kuwait have said a cut in output at the next meeting was unlikely.
    "The market sentiment will stay negative until OPEC appears to be unified," said Commerzbank's Weinberg. "Everybody is blaming each other but nobody is willing to cut."
    There is a growing lobby in the United States to lift a 40-year ban on U.S. crude exports which if successful could ease a supply glut in the Atlantic Basin.
    A stronger dollar was also weighing on oil prices, making the commodity more expensive for buyers using other currencies.    The dollar touched a four-year high on Monday, before slipping back slightly on Tuesday.

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Nigerian naira falls on low supply of dollars

Nigeria's naira slipped against the dollar on the interbank market on Monday, driven by tight supplies of the U.S. currency and sustained strong demand from offshore investors selling their equity holdings.
The local currency closed at 165.75 to the dollar, compared with 165.65 on Friday.
A unit of Addax sold $10 million to some lenders, Eni sold $2 million while Royal Dutch Shell sold an undisclosed amount of dollars. But aggregate dollar flows were seen as insufficient to support the local currency.
"Many offshore investors in fixed income assets and equity considered the naira at this level a trigger for their exit from the local market," one dealer said, noting that this had fed the pressure on the local currency.
The naira has been under pressure over the past six weeks from falling global oil prices and a drop in Nigeria's forex reserves, which has led offshore investors to cut back their positions in the debt and stock markets.
Traders said the naira had weakened to around 166.02 to the dollar intraday, but recovered a little after sales of dollar by energy companies.
The local currency is expected to stay in a range in the days ahead as more energy firms sell dollars in the interbank market and central bank keeps watch over currency moves.

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