The Nigerian naira rose to a new high of 117.95 to the dollar on the interbank market on Thursday from 118.40 on Tuesday on the central bank's support and huge dollar inflows from oil majors, traders said. The naira has gained 6.62 percent against the dollar since Aug. 30 bouyed by steady forex inflows from foreign portfolio investors and weakness of the dolla against major currencies.
Oil multinationals have sold over $260 million to retail banks since Monday, raising the dollar liquidity in the market.
Traders said the naira was also helped by the central bank's revaluation of the currency to 116.96 per dollar at its forex window on Wednesday versus 117.68 previously.
"Though the central bank did not sell dollars at its auction on Wednesday, it revalued the naira by 0.72 naira and this was reflected at the interbank market," one dealer said.
Dealers said the naira should maintain its gains in the weeks ahead as the government has pegged the exchange rate at 117 naira to the dollar in its 2008 budget.
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Naira Appreciates Against US dollar in Parallel Market
Naira Appreciates Against US dollar in Parallel Market - CBN
Atser Godwin
The value of the naira appreciated by 0.4 percent against the United States dollar in the parallel market or bureau-de-change, trading at N120 per dollar, the Central Bank of Nigeria, said on Monday. However, the average effective exchange rate of the naira remained at N117.98 per dollar.
"The average weighted effective exchange rate depreciated marginally by 0.1 percent below the level in the preceding week to N117.46 per dollar," the bank said. Meanwhile, foreign exchange offered for sale under the Wholesale Dutch Auction System remained at $160m, the same as in the preceding week. The bank said aggregate demand for foreign exchange by authorised dealers was $96.75m as against $129.27m in the preceding week, which made it not to sell foreign exchange at the WDAS window.
The CBN said premium between the official and bureau-de-change rates decreased by 2.1 percent in the previous week to 1.7 percent during the week under review.
The Naira has in recent times continued to gain against the dollar amid rising crude prices that are trading above $90 per barrel. Nigeria, which pumps the largest amount of crude to the US, has made billions of dollars that have helped her foreign reserves to climb above $50bn. In spite of violence in the Niger Delta, the CBN said crude oil output steadied at 2.21 million barrels per day between November and December, 2007. Militants seeking control of Nigeria's oil wealth have disrupted about a quarter of the nation's production capacity, a situation that has resulted to spikes in international prices of crude.
According to economic indicators posted by the CBN on Sunday, the average price of Nigeria's reference crude, Bonny light, stood at $90.62 per barrel as at January 25, 2008. Bonny light traded at $92.77 per barrel a week earlier, the CBN said.
