Nigeria's naira strengthened by 1 percent against the dollar on the interbank market on Monday, supported by the central bank's intervention to stem the depreciation of the local currency.
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"The central bank sold dollars to some banks today, while speculation that NNPC (state-owned energy firm) called for bids from some banks to buy its dollars helped strengthen the naira," one dealer said.
NNPC usually sells around $500 million to banks every month but it hasn't supplied any foreign exchange since July, adding pressure on the local currency at the interbank market.
The naira weakened to a 20-month low on Friday after previous attempts by the central bank to lift the naira failed.
"The naira might hold at the 162 to the dollar level this week if NNPC is able to conclude its dollar sales by tomorrow and the volume is substantial," another dealer said.
At the official forex auction, the central bank sold $300 million at 155.76 to the dollar, compared with $260.75 million sold at the same rate on Wednesday.
The central bank said last week it would resist pressure to devalue the naira since it has ample foreign exchange reserves to defend the currency.
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