Naira Hits 4-Week High Against Dollar

The value of Nigeria’s currency hit four-week record high against the US dollar on the interbank market, occasioned by huge supply of dollar from four energy companies.

Naira closed at 157.10 to the dollar on the interbank market, stronger than the 157.38 it closed at the weekend.

On Monday, the Central Bank of Nigeria (CBN) offered for sale $180 million at the Wholesale Dutch Auction System (WDAS), while $164.28 million was sold between N155.76 and N155.79. All the banks that bidded at the market were successful.

The Naira has not been this high since October 31, when it closed at the same level.

Traders said the Naira was supported by dollar sales by units of ExxonMobil, which sold $50 million and Agip $5 million, while Royal Dutch Shell and Nigerian Liquefied Natural Gas (NLNG) sold unspecified amount.

“We have a lot of dollar flows to the market today from some energy companies, which helped to take out the few dollar demand and provided support for the Naira,” one dealer said.

Traders also said the demand for hard currency was gradually declining after some importers had built up their stocks for the forthcoming Christmas, and this is expected to reduce pressure on the local currency in the near term.

“We see the Naira stabilising at the present level of 157.10-157-50 to the dollar because of expected additional dollar flows from some oil companies and offshore investors buying treasury bills at an auction later in the week,” another dealer said.

On the official window, the naira remained unchanged at 155.76 to the dollar as the central bank sold only $154.28 million compared with $200 million sold at the last auction.

Nigeria plans to sell N127.97 billion worth of treasury bills with maturities ranging from three months to one year on December 5, at its twice-monthly auction.