Naira gains on dollar sales by oil firms

The naira firmed 1.13 percent against the dollar on the interbank market in thin trade on Monday, supported by dollar flows from Shell Petroleum Development Company of Nigeria (SPDC) and Eni.

The naira closed at 199.7 to the dollar compared with 202 on the interbank market on Friday, dealers said.

The Central Bank of Nigeria (CBN) had set its intervention rate at 196.8/197.8 to the dollar on Monday, but dealers said the regulator had not yet sold dollars to lenders by 1302 GMT.

SPDC  sold an undisclosed amount of dollars while Eni sold $15 million, lending support to the naira, traders said.

The currency of Africa’s top crude exporter suffered its biggest monthly fall in over five years in February on concerns over political uncertainty and the central bank’s ability to manage a currency hammered by weak oil prices.

“There was not much of activity in the market today, apart from dollar sales by the two oil companies which boosted liquidity a bit and supported the naira,” said a trader.

Traders expect the local currency would be driven by availability of dollar inflows through anticipated month-end sales by oil companies during the week.