Naira hits new high against dollar

The Nigerian naira rose to a new high of 117.95 to the dollar on the interbank market on Thursday from 118.40 on Tuesday on the central bank’s support and huge dollar inflows from oil majors, traders said. The naira has gained 6.62 percent against the dollar since Aug. 30 bouyed by steady forex inflows from foreign portfolio investors and weakness of the dolla against major currencies.

Oil multinationals have sold over $260 million to retail banks since Monday, raising the dollar liquidity in the market.

Traders said the naira was also helped by the central bank’s revaluation of the currency to 116.96 per dollar at its forex window on Wednesday versus 117.68 previously.

“Though the central bank did not sell dollars at its auction on Wednesday, it revalued the naira by 0.72 naira and this was reflected at the interbank market,” one dealer said.

Dealers said the naira should maintain its gains in the weeks ahead as the government has pegged the exchange rate at 117 naira to the dollar in its 2008 budget.

Source: Vanguard Newspaper