Nigerian naira firms to 5-mth high on NNPC dollar sales

The Nigerian naira currency strengthened for the fifth day in a row against the dollar on the interbank market to a 5-month high on Wednesday, supported by large dollar sales by the state-owned energy company NNPC.

CBN Abuja HQ

The local unit closed at 158.45 to the dollar, compared with the 158.6 to the dollar it closed the previous day. The naira was last seen at this level in June 4, when it closed at 158.40 to the dollar.
Traders said the state-owned energy firm the NNPC sold about $329 million to some lenders on Tuesday, boosting greenback liquidity in the market and helping the local currency to gain value.
"The market is presently liquid as a result of the NNPC dollar sales yesterday. Though there was a bit of demand intraday, the naira closed stronger at the close of the market," one dealer said.
Traders said some units of foreign banks initially took advantage of the cheaper dollars to buy for offshore clients, but more lenders later sold dollars in the market, which provided support for the naira.
The naira has also been well supported in the past two weeks by higher than expected volumes of dollars sold by energy companies and central bank measures to limit dollar cash sales by banks to forex bureaux.
Traders said the naira could reverse some of its recent gains in the near term as most oil companies have concluded their month-end dollar sales.