(Adds trader comment, overnight rate, naira level)
By Oludare Mayowa
LAGOS, May 5 (Reuters) - Nigeria's central bank sold short-term naira debt at yields above inflation for the third day running on Friday, traders said, supplementing a run of dollar sales in a two-pronged effort to prop up the ailing local currency.
Treasury bill sales support the currency by draining some of the cash in the market, thereby making the naira slightly stronger against the dollar.
After introducing a complex, multi-tiered exchange rate system, the bank has been intervening since February to prop up the naira, a victim of the country's first recession since 1991.
It has sold more than $4 billion on the spot and forward currency markets and has in recent months been offering high yields to attract investors to its one-year debt.
On Friday the central bank sold 18.88 billion naira in one-year treasury notes at 18.6 percent, a premium to annual inflation that stood at 17.26 percent in March. It issued 200 billion naira in bills the previous day and 230.60 billion on Wednesday, also at high yields.
"The central bank embarked on aggressive liquidity mop-up this week ... leaving banks scrambling for available cash in the system," one trader told Reuters.
The bank sold dollars to lenders from Monday to Thursday to soak up naira, but none on Friday, traders said.
The bank's actions drove lenders to borrow from its discount window to cover their position after overnight rates hit 53 percent at Friday's open before falling back to 19 percent.
The naira was quoted weaker on Friday at the investor trading window, at 382.69 per dollar, data from market regulator FMDQ OTC Securities Exchange showed. The official market rate, at 305.70, and the black market rate, at 391, were little changed.
$1 = 314.50 naira Editing by Chijioke Ohuocha and John Stonestreet