The Nigerian naira firmed against the U.S dollar on the interbank market on Wednesday, supported by large dollar sales by state-owned energy company NNPC and expectations of additional dollar inflows in the coming days, traders said. 

The naira closed at 157.50 to the dollar on the interbank, firmer than the 157.80 to the dollar it closed at on Tuesday. 

Traders said NNPC sold around $350 million to some lenders, which provided support for the local currency, while expectations of additional sales of $350 million by the energy firm before the end of the week boosted outlook for the naira at the interbank. 

“The naira is set to strengthen further in the coming days if the NNPC and other oil companies sell more dollars to the market as being speculated in the market,” one dealer said. 

Traders said dollar inflows from oil companies and off-shore investors have consistently provide support for the naira despite strong demand built up at both the interbank and official window. 

More offshore investors are investing in Africa’s second biggest economy’s local debt instruments because of attractive yields, helping to support dollar supply to meet domestic demand. 

At the bi-weekly forex auction, the central bank sold $150 million at 156.01 to the dollar, the same volume and rate at the previous auction on Monday.    

 Source: Reuters/Oludare Mayowa