The naira firmed against the U.S dollar on the inter-bank market on Monday, supported by ample dollar sales by two energy companies to some banks. The local currency closed at N161.60 to the dollar on the inter-bank market, stronger than the N162.10 to the dollar it closed at on Friday.
Bank treasurers said Shell and Nigerian Liquefied Natural Gas (NLNG) Company sold unspecified amount of dollars to some banks, which raised the level of dollar liquidity in the market and provided support for the naira.
“Apart from the dollar inflows from Shell and NLNG, speculations on planned dollar sales this week by the NNPC (state-owned energy company) also helped the market rally,” one dealer said. NNPC supplies the bulk of dollars traded on the interbank market and comes to the market twice in a month. Bankers said the naira is seen strengthening further in the week if the NNPC finally come to the market with some other oil companies sales as well.
On the bi-weekly foreign exchange auction, the central bank sold $200 million at $155.87 to the dollar, compared with $180 million sold at the same rate last Wednesday’s auction. The naira had closed weaker last week due to resurgence of demand for the dollar from importers and a drop in dollar liquidity.
previous post