Nigerian naira strengthens on adequate dollar supply

Channels Television  
Updated April 11, 2012

Nigerian naira strengthened against the U.S dollar on both the interbank market and official window on Wednesday, supported by large dollar inflows from oil companies and offshore investors. 

The local currency closed at 157.40 to the dollar on the interbank, firmer than the 157.50 to the dollar it closed on Tuesday.

Traders said local units of Chevron sold $70 million on Tuesday, while Total sold $6 million and Addax sold $10 million on Wednesday.

“There are some dollar inflows from offshore investors interested in this week’s treasury bills auction, while weak demand has also helped keep rates down,” one dealer said.

On the bi-weekly foreign exchange auction, the central bank sold $150 million at 155.80 to the dollar, compared with $150 million at 155.90 to the dollar at last Wednesday’s auction.

“We are expecting a gradual appreciation of the naira in the coming days because of the increase dollar inflows and weak demand at interbank and official window,” another dealer said.

Nigeria plans to auction 183.64 billion naira in 91-, 182- and 364-day treasury bills at an auction on Wednesday, which was expected to attract more offshore participation and increase dollar inflows into the economy.