Naira Interbank Market Halts as Nigeria Strikes Curb Bank Trades

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Naira Interbank Market Trading Halt

Naira Interbank Market Trading Halt

Nigeria’s naira trading ground to a halt on the interbank market as unions started a nationwide strike to protest an increase in gasoline costs, which are more than doubling, according to the Central Bank of Nigeria.

The currency of Africa’s biggest oil producer was less than 0.1 percent weaker at 162.05 per dollar as of 11:04 a.m. in Lagos, the commercial capital, according to data compiled by Bloomberg.

“No bank has appeared and so there is no activity going on right now,” Mohammed Abdullahi, a spokesman for the Abuja-based central bank, said by text message today. “The interbank market is not officially closed.”

The Nigerian Labour Congress and Trade Union Congress, representing more than 8 million workers, called an indefinite strike to force President Goodluck Jonathan to reverse a decision to scrap fuel subsidies. Banks, businesses, schools and most offices were shuttered and streets deserted today in Lagos and Abuja, the capital. Protest marches are also planned in major cities across the country, union officials said.

The naira interbank market is unofficially shut today as a “precautionary measure” owing to the general strike, Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd., said in an e-mailed reply to questions today.

The central bank is planning to go ahead with a foreign-currency auction today, said Abdullahi. “There’s no indication of any change” to the schedule of the twice-weekly currency auctions (NGAUMARG), he said, while declining to disclose how much the central bank would offer lenders.

Limited Services

Nigerian lenders, including Diamond Bank Plc and Standard Chartered Plc (STAN), will run limited branch services from today, according to officials at the companies.

“There has been significant civil protest against the Federal Government’s decision so today’s strike is likely to cause meaningful disruption to economic activity,” Leon Myburgh and Coura Fall, Johannesburg-based Africa strategists at Citigroup Inc., wrote in an e-mailed note to clients today. The strike is “weighing” on the naira, they said.

Ghana’s cedi was unchanged at 1.6585 per dollar as of 10:40 a.m. in Accra, the nation’s capital.

 

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