Naira appreciates on NNPC dollar sales to banks

The naira appreciated against the U.S dollar on the inter-bank market on Wednesday, as a result of the large dollar sales by NNPC to some banks and the expectations of additional dollar inflows in the coming days, market operators said.
The local currency closed at N157.50 to the dollar on the inter-bank, stronger than the N157.80 to the dollar it closed at on Tuesday. Traders said NNPC sold around $350 million to some banks, which provided support for the local currency, while expectations of additional sales of $350 million by the energy firm before the end of the week boosted outlook for the naira at the inter-bank. “The naira is set to strengthen further in the coming days if the NNPC and other oil companies sell more dollars to the market as being speculated,” an operator said.
Bankers said dollar inflows from oil companies and off-shore investors have consistently provided support for the naira despite strong demand built up at both the inter-bank and official window. More offshore investors are investing in Nigeria’s local debt instruments because of attractive yields, helping to support dollar supply to meet domestic demand. At the bi-weekly foreign exchange auction, the Central Bank of Nigeria CBN, sold $150 million at N156.01 to the dollar, the same volume and rate at the previous auction on Monday.