The naira rose by 0.18 per cent against the dollar on the interbank market on Monday, supported by the greenback sales by a unit of Royal Dutch Shell to some lenders.
The local currency closed at N162.40 to the dollar, firmer than the N162.70 it closed on Friday, the Reuters reported on Monday.
Shell's local unit sold an undisclosed amount of dollars to some lenders, boosting dollar liquidity and easing pressure on the local currency.
The local currency had touched a five-week low against the dollar on Thursday, on renewed dollar demand after a recent rally on the local currency.
Specifically, it closed at N162.70 to the greenback, a level last seen on July 2, and weaker than last Wednesday's close of N161.75.
But traders said on Monday that some importers had brought forward their obligations to take advantage of previous gains by the naira.
Another dealer said if the Nigerian National Petroleum Corporation failed to sell dollar by Tuesday or Wednesday, the naira could lose some value again.
The NNPC supplies a substantial amount of the dollar flows in the country. Traders are also expecting an inflow from offshore investors participating at a local debt auction this week.
The naira had fallen by 0.43 per cent against the dollar on the interbank market last Wednesday after importers brought forward their obligations to take advantage of a recent rally in the local currency.
Specifically, it closed at N161.65 to the dollar, weaker than the N160.95 that it closed the previous day.
Month-end dollar sales by some energy companies had provided support for the local currency in the last two weeks, keeping it within the band of N161.50-N162 against the dollar.
Most of the energy companies operating in the country buy the local currency at the end of the month to fund domestic obligations
"We see the naira stable around the present band in the near term, with more dollars expected from some energy companies," one dealer said.
PUNCH
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