Inflow of foreign exchange from crude oil marketers and the intervention of the Central Bank of Nigeria (CBN) on the sideline were able to stabilise the naira at the Wholesale Dutch Auction System (WDAS), otherwise known as the official market.
Three energy companies strengthened the naira against the dollar at the interbank market on Wednesday as about $216 million sold by three energy companies to some lenders provided support for the local currency.
The naira closed at N162.20 to the dollar at the interbank market, up from 162.40 on Tuesday.
Traders said though the central bank failed to meet all demands at its bi-weekly auction on Wednesday, dollar sales by local unit of France Total, Agip and Royal Dutch Shell totalling about $216 million and direct sales by the regulator to some lenders helped provide the needed support in the market.
At the official window, the central bank sold $200 million at N156.70 to the dollar, same figure and rate at the previous auction on Monday.
“The naira actually weakened to around N162.60 to the dollar intraday, but strengthened to N161.85 to the dollar after the inflows from the oil companies hit the market, before closing at N162.20 due to strong demand,” one dealer told Reuters.
Traders said demand remained strong in the market and could continue to keep the naira under pressure in the near term.
“We have a lot of demand from customers that have huge volume and could not get their bids through the central bank auction. These customers are forced to resort to the interbank to enable them meet their obligations,” another dealer said.
Traders said the central bank official continued to advise banks on the amount of dollars to be demanded and rate quotes to reduce pressure on the bi-weekly auction.