LAGOS: Nigeria's naira eased against the US currency on Wednesday, driven by strong dollar demand from some lenders trying to cover their short positions on the greenback, dealers said.
The local unit closed at 164.80 naira to the dollar, weaker than Tuesday's close of 164.40 naira.
The local units of two foreign banks sold dollars on Tuesday to boost interbank liquidity, but other lenders bought up hard currency to cover their short positions, dealers said.
"The central bank seems to be comfortable with the naira trading within this range many people expect them to intervene if the naira weakens beyond 165," one dealer said.
Dealers expect the naira to trade around the 164.50-165.20 level in the short-term, unless oil companies sell large amounts of dollars or the central bank intervenes to prop up its value.
Nigeria's central bank has been intervening in the interbank market to prop up the value of the naira in order to try to keep it trading within its preferred band of 150-160 naira to the US dollar.
But it has not intervened this week. Exxon Mobil's Nigerian unit sold $50 million to some lenders on Wednesday, dealers said.
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