Naira up 0.49 percent against U.S. dollar

The naira firmed 0.49 percent on Wednesday to a five-week high against the greenback, after dollar sales by some energy companies lifted the currency, dealers said.

The local unit closed at N163.90 to the U.S. dollar, its strongest level since February 19, when it closed at N163.80 and firmer than Tuesday’s close of N164.70.

The local unit of Chevron sold about $31.7 million on Wednesday, while ExxonMobil and Addax sold $50 million and $10 million each late Tuesday, to boost dollar liquidity, dealers said.

Dealers said expectation that government-backed oil firm NNPC will sell the greenback before the end of the week led some lenders to offload their dollar positions to lock in current exchange rates.

NNPC usually sells up to $400-$450 million in two tranches.

“We expect the naira to strengthen further … this week,” one dealer said.

The naira has stablised over the past week after the central bank hiked the cash reserves requirement on private sector deposits by 300 basis points to 15 percent, to curb liquidity.

Reuters