The naira firmed against the dollar on Wednesday, lifted by month-end dollar sales from multinational oil companies buying the local currency to meet their domestic obligations, dealers said.

Reuters reported that naira closed at N162.08 to the dollar, up 0.12 per cent from N162.28 it closed the previous day.

The local unit of Italy’s Eni sold $20m and France’s Total sold $55m, while two units of Addax sold a total of $10m and Shell sold an undisclosed amount onto the interbank market, dealers said.

Multinational oil companies operating in the country usually sell dollars every month in exchange for local currency to meet their local obligations.

Dealers expect the naira to strengthen further this week trading within a range of N161-N162 level as more oil companies sell dollars.

The naira had eased by 0.21 per cent against the dollar on Monday, after some importers took advantage of its recent appreciation against the greenback to lock in rates.

The local currency eased after last week’s gains, closing at N162.25 to the dollar on Monday after closing Friday at N161.90.

Dealers said some importers had set limit orders to buy hard currency and were in the market after recent gains.

The nation relies on imports for around 80 per cent of what it consumes.

The naira traded around N161.45-N161.90 to the dollar last week, lifted by dollar flows from oil companies and offshore investors buying local debt.

Last Tuesday, the naira rallied to a seven seven-week high after the local unit of ExxonMobil sold $50m to some lenders and offshore funds bought the local currency to participate in a debt auction.

The local currency closed at N161.90, a level last seen on May 22, when it closed at N161.81.

Volatile oil earnings, falling dollar reserves, delayed upside from the power reforms, among other factors have combined to upset naira’s exchange rate stability.

The naira, which traded N150 band for long after the volatility of 2009 occasioned by the world financial crisis, has struggled to stabilise at N160 region for many months now.