Naira firmed against the U.S. dollar on the interbank market on Monday after the Central Bank of Nigeria (CBN) met demand for the dollar at its currency auction.
The unit firmed to close at N158.35 to the dollar on the interbank, after weakening to N158.50 intra-day, compared with Friday’s close of N158.40.
The Central Bank of Nigeria sold $245.45 million at its official window at N155.74 to the dollar, after initially offering $300 million, as against $207.66 million it sold at its last auction on Wednesday.
“The naira … strengthened after the result of the central bank auction showed weak demand,” one dealer told Reuters.
Dollar sales by oil companies and offshore funds buying local bonds have kept the naira stable at around 157 level to the dollar in the last two weeks but a resurgence in demand for the greenback dragged the currency down to a three weeks low on Friday.
CBN plans to sell N121.33 billion ($771 million) worth of treasury bills, which could attract foreign investors and help support the naira. Dealers expect the naira to trade between N158.50 and N158.90 this week as oil company dollar sales will likely remain weak, unless cash from portfolio investors taking positions in bonds materialise.
