LAGOS — The naira, strengthened against the U.S dollar, yesterday, in the inter-bank market after the Central Bank of Nigeria, CBN, offered to sell foreign exchange to lenders, although the apex bank retracted the offer after the market close.

Also, Nigeria’s reserves appreciated sharply to $34.59 billion by October 14, from a multi-year low of $30.86 billion on October 7, CBN’s latest figures showed. The reserves were at the same level a year ago.

The nation’s currency closed at N159.85 to the dollar at the inter-bank market, yesterday, compared to N162.80 to the dollar at Monday’s close.

Trading was limited as the market remained nervous over recent exchange rate volatility.

The naira fell to an all-time low last week before CBN introduced several measures to tighten naira liquidity and release dollar supply, while also selling foreign exchange aggressively at auctions and directly into the market.

Traders said CBN offered to sell $200 million to some lenders in a special forex intervention aimed at supporting the local currency.

The regulator later abandoned the sales, dealers said.

“We see the naira depreciating further tomorrow at the inter-bank because of the latest news that the central bank will no longer sell the $200 million again,” one dealer said. The regulator sold all the $296.91 million demanded at its bi-weekly forex auction on Monday at 149.95 naira to the dollar, strengthening the local currency from 150 to the dollar at the previous auction last week.

The CBN wants the naira to trade within 145.5-154.5/$ band but pressure on the local currency in the interbank market has led to calls for a adjustment of the channel, affectively a devaluation. By selling foreign exchange at auctions the central bank is eating into reserves built up by the sale of Nigeria’s oil.

Reserves have not risen in the last year despite high oil prices and steady production.