The Nigerian naira firmed to a 3-week high against the U.S. dollar in the interbank market on Wednesday after oil companies sold the greenback and the central bank auctioned $250 million at its biweekly forex market.
The naira closed at 160.05 to the dollar on Wednesday, the same level it traded at on Jan. 4, after touching an intraday low of 159.80 naira.
The unit closed at 160.80 naira on Tuesday.
"The market reacted to the increase in dollar supply from three multinational oil companies and the inflows from NNPC's sales last week," one dealer said.
Traders said Royal Dutch Shell sold $100 million, Total $66 million and Addax $10 million, boosting dollar liquidity, and they said last week's $550 million sale by state-owned NNPC was still affecting the system.
At the biweekly foreign exchange auction, the central bank sold $250 million at 156.85 naira to the dollar, compared with $250 million sold at 157 naira on Monday. It didn't disclose the level of demand.
"We expect the naira to continue to strengthen because more lenders are waiting to receive dollar inflows sold by oil companies," another dealer said, adding that the unit could firm to 159 naira by Thursday.