The weakness of the local currency, the Naira is likely to be temporary, the Central bank Governor, Mallam Sanusi Lamido Sanusi has assured over the weekend.

Sanusi told Reuters that the monetary tightening measures have started taken effect and it will, strengthen local currency.

The Naira slumped to its lowest ever on Monday, just before an emergency Central Bank of Nigeria (CBN) meeting where interest rates were hiked far further than analysts expected and several other tightening measures were imposed.

The Naira initially recovered from the record low of 167.8 to the dollar as the CBN backed up its interventions by selling over $1 billion into the market in a week, traders said.

But trading on the local currency remains volatile with dealers not willing to quote actively. The Naira ended the week at 164.05 in the interbank market, far weaker than at the central bank's auction on Wednesday when the regulator sold $591.67 million at 150 Naira to the dollar

"My feeling is the Naira is going to strengthen as measures kick-in," Lamido Sanusi told Reuters in a telephone interview. "What you are seeing this week is not the long-term trend.

CBN has been trying to save the local currency from depreciating by maintaining it within a band of +/-3 percent around 150 naira to the dollar but analysts say the options left for the regulator may be limited given falling reserves and weak oil prices.

Under pressure to keep up with rising dollar demand, CBN breached its own rule earlier this month by selling outside the 145.5-154.5 naira/$ band at a series of auctions, creating uncertainty about the value of the naira at the interbank market .

I just hope the naira gets strengthened again to avoid putting more higher risks on the economy.