Friday January 20, 2012 2:00pm
The Nigerian naira firmed against the U.S dollar on the interbank market on Friday to its highest level in 18 days after state-owned energy company NNPC sold about $550 million to some lenders, providing support for the local currency.
The naira closed at 160.95 to the dollar, firmer than 161.55 at Thursday's close, having traded around 160.20 intraday. It last traded at 160.20 on Jan. 3.
Traders said the sudden increase in dollar liquidity in the market, owing to the currency sales by the NNPC provided support for the naira as those who won the bids were willing to sell to others at the interbank.
"Next week we are most likely to see the naira trading within the range of 160.20-161.50 to the dollar on the interbank market as we expect more energy companies to sell dollars in the market," one currency dealer said.
Most of the energy firms operating in Africa's top crude exporter sell dollars to banks on a monthly cycle to obtain naira for their local obligations.
"The NNPC's $550 million is a lot of money, so it will take a while before we see any serious depreciation in the naira rate," a senior trader with Access Bank said.
Source: Reuters (Reporting by Oludare Mayowa)