Nov 28, 2014/Bloomberg

The naira posted its worst monthly drop in almost six years against the dollar and Nigerian stocks retreated for the fifth month amid tumbling oil prices.

The currency of Africa’s largest oil producer fell 2.1 percent to 178.65 per dollar as of 5:35 p.m in Lagos, a record low on a closing basis. The naira weakened 7.3 percent this month, the most among the 24 African currencies tracked by Bloomberg and worst month since December 2008. The Nigerian Stock Exchange All Share Index declined 0.5 percent to extend losses this month to 8 percent.

The 12-nation Organisation of Petroleum Exporting Countries kept output targets unchanged even after the steepest oil slump since the global recession. Crude exports account for about 70 percent of Nigerian government revenue. The central bank tried to bolster the naira by increasing interest rates to a record high on Nov. 25 and changed the range used to buy naira at foreign-exchange auctions to 168 per dollar, plus or minus 5 percent, from within 3 percent of 155.

“The OPEC decisions have increased the risk to the nation’s economic outlook,” Ayodeji Ebo, head of research at Afrinvest West Africa Ltd. in Lagos, said by phone. “That means the naira could need a new support level.”

Yesterday’s announcement by OPEC may force the central bank to increase sales of dollars to banks in the interbank market, he said.

Nestle Nigeria Plc made the biggest contribution to the drop in the NSE All Share Index today, falling 5 percent, while FBN Holdings Plc (FBNH), the owner of First Bank, the country’s largest lender, declined 4.3 percent.

Brent crude was up 0.2 percent to $72.74 a barrel, paring its loss this month to 15 percent. It fell 6.7 percent yesterday after OPEC, including Nigeria, agreed in Vienna to maintain production at 30 million barrels per day.