Nigeria's naira rallies for second day on intervention

By Chijioke Ohuocha and Oludare Mayowa

By Chijioke Ohuocha and Oludare Mayowa

LAGOS (Reuters) - Nigeria's naira rose for the second straight day on Wednesday after the central bank sold dollars but still closed below the bottom of its new target range, dealers said.

The naira has lost 11.8 percent against the dollar this year, as global oil prices plunged, worsening the already shaky finances of Africa's top oil producing nation.

The naira ended up about 0.6 percent at 179.90 against the dollar from Tuesday's close of 181 naira. It firmed almost four percent on the previous day after the central bank intervened to help the currency up from another record intraday low.

The naira was hovering around 183.15 naira to the dollar for almost three hours before Wednesday's intervention.

"The central bank has shown commitment to support the naira, but reserves are going down and at the end of the day the bank's ability to sustain its support will be hampered," a dealer said.

"We expect more drastic measures in the near term," he said.

Nigeria's foreign reserves fell to a six-month low of $36.7 billion by Dec. 1, down 4.5 percent from the previous month, limiting the central bank's ability to keep defending the naira.

The bank devalued the currency by 8 percent last week in a bid to halt a decline in foreign reserves but it has been struggling to keep the naira within its new band of 160-176 to the dollar.