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Nigeria’s naira rose 2.35 percent against the U.S. dollar on Friday after the central bank sold dollars to prop up the value of the local currency.

The naira closed at 165.90 to the dollar compared with 169.90 to the dollar the previous day.

The naira had touched new intraday lows of 173.02 on Friday amid demand for dollars, partly from foreign investors unnerved by falling oil prices exiting Nigeria and partly from domestic importers worried about the risk of a currency devaluation.

Dealers said the central bank sold undisclosed amount of dollars.

“We saw the central bank increased its dollar sales at the interbank market today to counter surging demand and reassure the market of its intention to continue to defend the naira,” one dealer said.

Traders said the dollar sales by the central bank coupled with flows from state-owned energy company NNPC on Thursday further strengthened the local currency.

The central bank on Thursday restricted the sale of dollars to importers of telecoms equipment, power generators and finished products at its foreign exchange auction, funnelling demand towards the interbank market.

Source: Reuters

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