Nigeria’s naira rebounded from a record low against the dollar after the central bank of Africa’s second-largest economy said it intervened in the market and has enough reserves to keep defending the currency.

“There is a great need to defend the currency because we don’t want volatility,” Central Bank of Nigeria Deputy Governor Sarah Alade said by phone from Lagos today. “Whenever there is need to intervene, we will do so.”

The naira strengthened as much as 1.8 percent, the most on an intraday basis in a week, and was trading 1.5 percent up at 162.95 per dollar as of 1:49 p.m. in Lagos, snapping three days of losses. The currency weakened 0.4 percent yesterday to 165.36 per dollar, the lowest closing level since Bloomberg started compiling data in 1999.

The currency of Africa’s biggest oil producer is under pressure amid a global selloff of emerging markets spurred by the Federal Reserve’s paring of stimulus. The naira has also been falling since the regulator last month removed the weekly limit of $250,000 that may be sold to a bureau de change. The central bank sells foreign currency at twice-weekly auctions to shore up the naira. The bank also sells dollars directly to lenders at irregular intervals.

Nigeria’s foreign-exchange reserves have fallen 16 percent since last year’s peak in May to $42 billion as of Feb. 12, the lowest level since October 2012.

The bank has an “allowance to support the naira,” Alade said. “With foreign reserves at $41 billion we are still capable of doing that.”

Source: Bloomberg (by Emele Onu)