LAGOS (Reuters) - The Nigerian naira rallied to a two-month high of 117.78 to the U.S. dollar on the interbank market on Thursday from 117.83 on Tuesday, on the back of big dollar inflows, traders said.

The central bank sold $201.50 billion to retail banks at its Wednesday auction, compared to $119.50 million on Monday.

Dealers said corporate demand for naira from oil firms and offshore interest in one-year treasury bonds sold on Wednesday at an over-subscribed central bank auction were also thought to have contributed to the naira's strength.

"The naira appreciated based on oil firms and off-shore inflows," one dealer said.

Dealers said there was speculation that First Bank Plc and state-run oil firm NNPC had sold large amounts of dollars. Nigerian banks typically sell dollars when their dollar reserves get too high.

Bankers said the naira should be able to sustain the gain depending on the volume of inflows from sources other than the central bank next week.