Dollar supply bolsters naira

The naira strengthened against the dollar at the interbank market yesterday, reaching its strongest in almost three months, as a unit of Royal Dutch Shell sold dollars and demand for the greenback weakened.

The nation’s currency closed at N160.90 to the dollar, up by 0.36 per cent over Friday’s close of N161.48 to the dollar. The last time the naira was that strong was on May 5, when it closed at N158.75 to a dollar.

A unit of Shell sold an undisclosed amount of dollars to some lenders, providing dollar liquidity and support for the naira, according to Reuters.
Month-end dollar sales by energy companies have supported the local currency for the past three weeks, keeping the naira within a band of N161.35 to N161.90 against the dollar.

“We are still expecting a further gain in the naira value this week,” one dealer said, pointing out that the Nigerian National Petroleum Corporation, the state-owned energy company, and some other oil companies had yet to sell dollars.

Most of the energy companies operating in Africa’s biggest economy buy the local currency at the end of the month to fund domestic obligations.

[This Day]

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