The naira gained strength against the dollar yesterday after the value of the greenback dropped on the global market and demand for local currency surged ahead of the Wednesday treasury bills sales.
At the interbank, the value of the naira moved from N184.10 which it closed on Monday to N181 to the dollar. More than $55 million was sold by international oil companies yesterday even as some banks were buying naira ahead of a treasury bill auction today, dealers said.
Having lost more than 12 per cent of its value this year, the naira gained strength as China’s Addax sold $4.5 million, while Mobil’s $36 million and Saipem’s $15 million at the forex market.
“We expect the naira to strengthen further if the central bank continues to intervene this way, coupled with the market expecting large dollar sales from NNPC,” one dealer said.
The Central Bank of Nigeria (CBN) had also intervened three times to lift it from yet another record intra-day low, dealers said.
The CBN failed to meet dollar demand at its twice-weekly auction on Monday, when it sold about $169 million dollars at N168 versus last week’s rate of N165, dealers said. The bank has typically sold between about $200 million and $300 million at previous auctions.
As oil prices stay persistently weak around five-year lows, the central bank, which devalued the currency by eight per cent last week, has been struggling to keep the naira trading within its new band of N160-176 to the dollar.
At the global scene, the value of the dollar slipped against speculations that it may have risen too fast.
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