Nigerian naira gains on planned oil firm dlr sales

Traders said the local currency strengthened to 157.40 to the dollar, 0.25 percent firmer than the 157.80 to the dollar at Friday's close.

The naira firmed to 157.20 to the dollar last week on the back of large dollar flows from oil companies and offshore investors buying local debt, but later in the week eased on the back of strong corporate demand for the hard currency.

Demand for the dollar was very strong last week from some importers, driving the naira to its weakest in weeks. But people are anticipating large dollar flows this week from oil companies month-end sales, that was why the naira appreciated today, one dealer said.

Traders said the market reacted to speculation that units of Royal Dutch Shell and ExxonMobil plan to sell dollar this week, coupled with some dollar inflows from offshore investors in local debt.

We see more oil major companies coming into the market this week and the naira should settle within the present band in the coming days, another dealer said.

Most oil multinational oil companies operating in Africa's top energy producer sell dollars to banks on a month-end cycle to obtain naira for their local obligations.

On the bi-weekly foreign exchange auction, the central bank sold $120 million at 155.70 to the dollar on Monday compared with $110.50 million at 155.65 to the dollar last Wednesday.