Nigerian naira eases on importer demand for dollars

The Nigerian naira eased slightly against the dollar on the interbank market on Monday after dollar demand from importers put pressure on foreign currency liquidity, dealers said.

The naira ended at 159.20 to the dollar, weakening from a close of 158.85 on Friday when it hit a 2-1/2 month high, helped by U.S. oil giant Chevron selling $54 million to banks in exchange for naira.

The currency was unchanged after a central bank auction on Monday.

The bank sold $250 million at 156.50 naira to the dollar at the auction, the same rate and amount sold at its previous auction last Wednesday.

Nigeria, Africa’s second-biggest economy, lacks a manufacturing base and imports 80 percent of its goods, thereby draining available hard currency. In turn, it generates most of its dollars from crude oil sales.

Dealers say they expect dollar sales this week from energy firms including state-owned NNPC to help give the naira a boost.

“We expect the naira to strengthen this week because of expected dollar sales by NNPC, Mobil and Shell ,” one dealer said, adding that interbank rates could start to converge with central bank rates if dollar liquidity is sustained.

The naira lost 4.5 percent against the dollar in 2011 but analysts say the Nigerian currency is likely to appreciate this year given the country’s foreign reserves of $34.72 billion and because of oil companies’ expanding supply of dollars.

“The market has witnessed significant dollar inflows from energy firms since the beginning of the year which will help stabilise the value of the currency in the medium term,” he told Reuters.