TheCable

Naira rose sharply against the dollar on Tuesday after the central bank intervened three times to lift it from yet another record  low, dealers told Reuters.

The naira closed at N181 against the dollar, up 3.6 per cent from its early session low of N187.55.

Naira closed at N184.10 on Monday.

As oil prices stay persistently weak around five-year lows, the central bank, has been struggling to keep the naira trading within its new band of 160-176 naira to the dollar.

The naira has lost 12.3 per cent this year.

Dealers revealed oil companies were also selling dollars and some banks were buying naira ahead of a Wednesday’s Treasury bill auction.

“We expect the naira to strengthen further  if the central bank continues to intervene this way, coupled with the market expecting large dollar sales from  Nigerian National Petroleum Corporation (NNPC),” one dealer said.

The central bank failed to meet dollar demand at its twice-weekly auction on Monday when it sold about $169 million dollars at 168 naira versus last week’s rate of 165 naira, dealers said.

The CBN has typically sold between about $200 million and $300 million at previous auctions.

The central bank devalued the naira last Tuesday to try to halt a decline in the foreign reserves of Africa’s leading energy producer as oil prices slump.

Reserves are down to $36.8 billion by November 28, compared with $44.6 billion a year ago.

But doubts remain about whether the devaluation went far enough given the likelihood of continuing low oil prices and the bank’s inability to maintain the new band.

Brent oil was trading below $72 a barrel.