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Naira rallies against dollar on big forex inflows
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The Federal Government had said in December that it would refund the $1.8 billion taken in 2006 from some states’ share of the savings to pay back debts owed to the Paris club. That promise was fulfilled on Wednesday, bankers said.
“There was a surge in dollar supply from some oil firms, while the inflow from the repayment to the states helped strengthen the naira,” one dealer said.
Traders said the increased dollar inflows helped sustain naira’s rally in the interbank market despite the refusal of the central bank to sell dollars at its twice-weekly auction for four consecutive weeks.
The naira has gained 7.18 percent since the end of August on inflows from foreign investors in bonds, dollar depreciation against major currencies and increased oil revenue thanks to surging prices.
Bankers said the announcement on Tuesday that the first instalment of another $4 billion in the oil windfall will be disbursed to all the 36 states in dollars before the end of February is expect to keep the naira strong against the dollar in the weeks ahead.
“There was a surge in dollar supply from some oil firms, while the inflow from the repayment to the states helped strengthen the naira,” one dealer said.
Traders said the increased dollar inflows helped sustain naira’s rally in the interbank market despite the refusal of the central bank to sell dollars at its twice-weekly auction for four consecutive weeks.
The naira has gained 7.18 percent since the end of August on inflows from foreign investors in bonds, dollar depreciation against major currencies and increased oil revenue thanks to surging prices.
Bankers said the announcement on Tuesday that the first instalment of another $4 billion in the oil windfall will be disbursed to all the 36 states in dollars before the end of February is expect to keep the naira strong against the dollar in the weeks ahead.
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