Nigeria’s naira firmed against the U.S dollar on the interbank market on Wednesday, supported by dollar inflow from offshore investors buying local debt and waning demand for hard currency, traders said.

The local unit strengthened to 157.25 to the dollar, firmer than the 157.39 it closed at on the previous day.

Traders said dollar flows from foreign investors taking positions in the local debt market and sales by some oil companies earlier in the week buoyed dollar liquidity.

Nigeria plans to issue 171.83 billion naira ($1.09 billion) in treasury bills ranging from 3-month to 1-year maturities at its regular bi-monthly debt auction on Oct. 11. [ID: nL6E8L4E4B]

On the bi-weekly auction, the central bank sold $120 million at 155.75, compared with $104.8 million sold at the same price on Monday.

“We expect the naira to strengthen further in the coming days as the market await the second tranche of NNPC (state-owned energy company) dollar sale,” one dealer said.

The NNPC sold about $250 million to some lenders last week, boosting the local currency to its strongest in five weeks.

The firm supplies the bulk of dollar traded on the interbank market.

Source: Reuters (Reporting by Oludare Mayowa; Editing by Tim Cocks)