Naira recorded its highest gain in 18 months on Monday, snapping four days of decline as the Central Bank of Nigeria sold $300m in its Wholesale Dutch Auction System market.
The currency strengthened by 1.6 per cent to N160 per dollar in Lagos, its biggest gain on a closing basis since December 26, 2011, data compiled by Bloombergindicated.
The CBN sells dollars at auctions on Mondays and Wednesdays to support the naira and occasionally offers currency directly to lenders to reduce demand.
The naira retreated by 1.9 per cent last weeks, the worst five-day drop since December 26, 2011.
An analyst at Ecobank Transnational Incorporation, Kunle Ezun, said, “Besides the regular forex auction, the CBN sold dollars directly to some banks, which helped to strengthen the naira.”
The external reserves have remained stagnant at N48bn for over three months, according to statistics obtained by our correspondent.
The reserves, which stood at $48.47bn on Monday, hit the $48bn mark on March 11, 2013, and had been up and down within the mark.
According to financial analysts, the domestic oil output has been negatively affected by several disruptions such as pipeline vandalism, bunkering and declaration of force majeure by oil companies.
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