Dec 1, 2014/Bloomberg

The naira weakened to a record against the dollar and the yield on Nigeria’s Eurobonds rose to an eight-month high as a slump in oil prices dimmed the outlook for Africa’s biggest crude producer.Na

The currency depreciated 2.9 percent to 184.05 at 2:20 p.m. in Lagos after falling to 184.51. Yields on Nigeria’s dollar July 2023 bond climbed 36 basis points to 6.11 percent, the highest on a closing basis since March 25. The yield rose above similar-maturity debt for lower-rated Kenya, an oil importer, for the first time since the Nairobi-based government issued its bonds in June.

Surging supplies in the U.S. amid limited demand growth has created a glut, helping send crude prices down 37 percent this year. Nigeria, Africa’s largest economy, relies on oil for 70 percent of government revenue and over 90 percent of export earnings.

“The momentum in the market is quite negative,” Samir Gadio, head of African strategy at Standard Chartered Bank Plc in London, said by phone. “If you talk to international investors, they are concerned about the exchange rate outlook because of weaker oil prices and fiscal issues.”

Brent crude weakened 0.1 percent to $70.05 a barrel after earlier falling to a five-year low of $67.53. The Organization of Petroleum Exporting Countries, including Nigeria, kept output targets unchanged last week even as price of crude heads for its worst year since 2008.