LAGOS — Naira appreciated the most in six weeks against the dollar after the Central Bank of Nigeria, CBN, data showed reserves have increased this month.
The Naira jumped one per cent to N155.20 per dollar in the interbank market by 10:29 a.m. in Lagos, the largest intraday advance since May 5.
Nigeria’s gross reserves stood at $34.1 billion as of June 13, a 6.2 per cent increase this month, according to CBN data. CBNGovernor Lamido Sanusi has been defending the naira by using foreign reserves in a bid to curb inflation. The bank attempts to keep the naira within a 3 percentage-point band above or below N150 per dollar at its twice-weekly auctions.
“We still believe the naira should be stable on the N150 mark,” Victor Ndukauba, an analyst at Lagos-based Afrinvest West Africa Ltd., said by phone. “A lot of the surge in dollar demand in our view is more artificial than real. We should find some accretion of reserves.”
Demand for dollars at CBN auctions peaked this year at $586.4 million on March 28, before dropping to as little as $277.1 million on April 27, during elections which returned incumbent President Goodluck Jonathan to power. Banks sought to buy $383.8 million at the last auction on June 13.
The inflation rate fell to a revised 11.3 per cent in April from 12.8 per cent a month earlier. The CBN raised its benchmark interest rate half a percentage point to 8 per cent on May 24, a third increase this year, as it tries to stabilise the naira and bring inflation below 10 per cent.