Nigerian naira firms on Central Bank direct dollar sales
Category: Money Market
Tuesday November 1, 2011 2:30pm
The Nigerian naira firmed against the U.S dollar on the interbank market on Tuesday, after the central bank sold dollars directly to some lenders, helping to provide liquidity and support for the currency.
The naira currency closed at 157.80 to the dollar, firmer than the 159.52 to the dollar on Monday's close.
Traders said the central bank sold dollars to some lenders towards the close of the market, where the naira had weakened to around 160.90 to the dollar initially, helping the currency to rebound.
Nigeria's Central Bank Governor Lamido Sanusi said on Monday the bank would review its target band for the naira in the next few days, and depending on where the exchange rate settles may move its midpoint to 155/156 to the dollar, compared to its current 150
Dealers said those comments initially put downward pressure on the market.
"The market initially reacted to the central bank statement that it will review its target band for the currency in the next few days to around 155-156 to the dollar midpoint, but later strengthen after the regulator intervened in the market," one dealer said.
The local currency weakened on both the interbank and bi-weekly auction on Monday as demand for the greenback outweighed supply.