By Agency Reporter   Thursday, 27 Jan 2011

The naira firmed against the sliding United States dollar at the inter-bank market on Wednesday as energy firms’ month-end dollar sales buoyed liquidity and supported the local currency, traders said.

According to Reuters, the dollar on Wednesday hit a two-month low against the euro after a promise of spending cuts from the United States President Barack Obama cemented expectations that the Fed would retain faith in its ultra-loose policy.

The naira closed at N151.95 to the dollar from N152.20 at Tuesday’s close, following a large foreign exchange sale by major energy companies to some lenders on Wednesday, while weak demand at the official window also provided support for the naira.

The Central Bank of Nigeria sold $250m at N150.31 to the dollar, a little shy of the $256.5m demanded, but equal to the $250m sold at N150.40 per dollar on Monday.

“We see the naira appreciating further in the coming days because more energy companies will be selling dollars between now and next week, coupled with weak demand at the official window,” one dealer said.

Source: Punch