By Bolaji Solagbade with agency report

The naira will be strengthening in the coming week on dollar flows from the energy sector, currency dealers have said.

They added that apart from the naira strengthening on expectations of large dollar inflows from energy companies, the conclusion of the presidential elections that saw President Goodluck Jonathan retain his position would also strengthen the naira.

The naira was trading at N154.65 to the dollar early on Thursday, compared with Wednesday’s close of N154.70, but dealers said that the election of Jonathan was a positive signal that there would not be any major policy shift.

Reuters quoted a dealer as saying, “We see confidence returning to the economy and possible foreign investors gradually considering some level of investment in the country with the successful completion of the presidential election. Now we are not expecting any significant shift in policy. That is good for planning and also confidence in the economy.”

Dollar demand has been persistently high in the run-up to the elections as businesses and wealthy Nigerians took long positions to hedge against the risk of instability around the polls.

The state-run energy company and some multinational firms are also expected to offload dollars as part of their month-end sales cycle, which would boost supply and help support the local currency, traders said.

Source: Punch