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Nigerian naira firms as funds, banks sell dollars

Naira, Nigerian Currency

Nigeria’s naira firmed against the U.S. dollar on the interbank on Wednesday, with large inflows from foreign investors buying short-tenored bonds and as banks sell the greenback to stay within a stipulated open position for them.

The unit firmed to closed at 157.90 naira to the dollar, recovering from an intraday low of 158.40 naira, compared with Friday’s close of 158.10 naira.

“Dollar inflow from offshore investors buying treasury bills helped lift the naira today,” one dealer told Reuters.

Nigeria sold 71 billion naira ($445 mln) worth of treasury bills on Wednesday, with maturities ranging from 3-month to 6-month. Dealers said foreign funds were active but didn’t give specific figures.

At the central bank’s bi-weekly foreign exchange auction, the bank sold $120 million at 155.80 naira to the dollar on Wednesday, compared with $200 million it sold at the last auction.

Dealers expect the currency to trade within the current band of 157.90-158.30 naira for the rest of the week but could strengthen further as month-end dollar flows from oil firms trickle in.

Last month, the central bank raised the cash reserve requirement for lenders to 12 percent from 8 percent, and reduced net open positions to 1 percent from 3 percent, to curb the money supply and support the naira. (Reporting by Oludare Mayowa; Editing by Chijioke Ohuocha and Tim Cocks)

Monday Ashibogwu

Monday Michaels Ashibogwu is Editor-In-Chief of QUICK NEWS AFRICA, one of Nigeria's leading online news service.

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