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Naira firms against dollar as investors eye Nigeria assets
October 20, 2014 / 3:52 PM / 3 years ago

Naira firms against dollar as investors eye Nigeria assets

LAGOS, Oct 20 (Reuters) - Nigeria’s naira firmed against the U.S. dollar on Monday as financial markets got a breather following weeks of sell-offs and two oil companies sold the greenback to some lenders, dealers said.

The unit closed at 165.28 naira to the dollar, firmer than Friday’s close of 165.35 naira, its lowest level since March.

Nigeria’s stock index ended a 10-day losing streak to gain 1.2 percent on Monday, with renewed buying after investors viewed the market as oversold.

“The recovery in the debt and equity markets impacted positively on the forex market,” one dealer said, adding that some oil companies also sold dollars to lenders.

Dealers said yields fell across the board in the bond market with the 10-year benchmark bond down 20 basis point on Monday to 12.75 percent, as buying pressure mounted from some pension funds.

Oil firm Seplat sold about $20 million while the local unit of China’s Addax Petroleum sold $8 million, to boost dollar liquidity on the interbank market.

The naira had been under pressure with the price of crude oil, Nigeria’s main source of foreign exchange earnings, resuming a downward move to fall below $86 a barrel on Monday as supply overwhelmed weak demand in several key markets.

The weakness in the local currency had triggered a sell-off in naira assets, as foreign investors, who make up more than half of trades on the local bourse, repatriated funds. (Reporting by Oludare Mayowa; and Chijioke Ohuocha; Editing by Mark Heinrich)

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