• Friday, May 24, 2024
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BusinessDay

Naira firms on NNPC dollar sales

The naira firmed against the dollar on the interbank market on Monday, gaining 0.48 percent, after Nigerian National Petroleum Corporation (NNPC) sold an undisclosed amount of U.S. currency to lenders.

The naira closed at 163.85 to the dollar, compared with 164.65 at Friday’s close.

The naira has been slipping since last month, weakened by falling global oil prices and low inflows of hard currency into Nigeria’s debt and equity markets.

Traders said the NNPC’s dollar sales brought a temporary relief to the market, but the naira is seen depreciating again, to the 164 to the dollar level, before Friday on persistent demand from mainly offshore investors selling down their bonds and equity holdings.

“As long as the oil price continues to slip, the naira will remain under pressure from those who will want to hedge against further loss,” one dealer said.

Nigeria is Africa’s biggest oil producer. Oil prices have fallen by more than 20 percent since June, touching a four-year low on Monday below $88 a barrel, and oil analysts forecast further falls.

Reuters