The naira is expected to extend gains against the U.S dollar next week on support from energy companies’ month-end dollar sales. The naira was trading at 161.75 to the dollar on the interbank market on Thursday, firmer than its close at 162.40 the previous day. Traders said the local unit of French oil company Total sold $110 million to lenders, boosting liquidity and support for the naira.
“We expect to see more dollar sales next week as part of usual month-end dollar flow from oil companies and this should further boost support for the naira,” one dealer said.
Foreign energy companies operating in Africa’s biggest crude producer sell dollars at the end of every month to obtain naira for their local obligations.
The naira rallied on Wednesday on the impact of dollar inflows from offshore investors who participated at this week’s treasury bill auction.