Nigeria’s naira strengthened against the dollar on the interbank market on Monday, reaching its strongest in almost three months, as a unit of Royal Dutch Shell sold dollars and demand for hard currencies weakened.
The local currency closed at 160.90 to the dollar, up 0.36 percent over Friday’s close of 161.48 to the dollar. The last time the naira was that strong was May 5, when it closed at 158.75 to the dollar.
A unit of Shell sold an undisclosed amount of dollars to some lenders, providing dollar liquidity and support for the naira. Month-end dollar sales by energy companies have supported the local currency for the past three weeks, keeping the naira within a band of 161.35-161.90 against the dollar
“We are still expecting a further gain in the naira value this week,” one dealer said, pointing out NNPC, the state-owned energy company, and some other oil companies had yet to sell dollars.
Most of the energy companies operating in Africa’s biggest economy buy the local currency at the end of the month to fund domestic obligations