Nigeria naira hits strongest level in two and half months
Friday February 10, 2012
Nigeria's naira firmed to 158.85 to the dollar on Friday, its strongest in two and half months, supported by dollar sales by energy companies.
The naira had closed at 159.20 to the dollar at the interbank on Thursday, its strongest since Nov. 16.
Traders said additional sales of about $54 million by U.S. oil company Chevron's local unit to banks had boosted dollar liquidity and helped the naira climb further.
The Nigerian currency has progressively strengthened against the dollar in the last two weeks as a result of large dollar sales by state-owned energy firm NNPC and some subsidiaries of multinational oil companies.
"Dollar liquidity remained strong in the market and we are expecting further gains in the near term because of possible additional flows from oil companies in the coming days," one dealer said.
Traders said the outlook for the naira was stable given confidence that the central bank's foreign reserves were at a comfortable level and due to increased revenue from oil exports.
Nigeria's foreign reserves stood at $34.72 billion by Feb. 2, better than the $30 billion comfortable threshold set by the central bank.