NNPC Rescues The Naira From Further Slide

State-owned oil firm, Nigerian National Petroleum Corporation (NNPC) yesterday saved the naira from depreciation when it sold $350 million to select lenders.

The Central Bank of Nigeria (CBN) only offered $150 million at the official window – Wholesale Dutch Auction System (WDAS).

The intervention by NNPC raised the value of the naira by 30 kobo to close at N157.50 at the inter-bank market from N157.80 it closed Tuesday.

Traders said NNPC sold around $350 million to some lenders, which provided support for the local currency, while expectations of additional sales of $350 million by the energy firm before the end of the week boosted outlook for the naira at the interbank.

"The naira is set to strengthen further in the coming days if the NNPC and other oil companies sell more dollars to the market as being speculated in the market," one dealer said.

Traders said dollar inflows from oil companies and off-shore investors have consistently provided support for the naira despite strong demand built up at both the interbank and official window.

More offshore investors are investing in Africa's second biggest economy's local debt instruments because of attractive yields, helping to support dollar supply to meet domestic demand.