The naira on Wednesday continued its fall against major currencies on the parallel market, closing at 318 against the United States dollar.
Mature obligations to overseas companies by Nigerian importers, causing acute shortage of foreign exchange have reportedly made the naira to fall further on Wednesday.
But the stock index climbed up to 24,000 points for the first time in almost a month, according to a report by Reuters.
It was the third time in three days the naira would experience a drop. The local currency, which was traded at 310 for a dollar on Monday and 313 on Tuesday, crashed again on Wednesday against the dollar, amid dwindling liquidity, the report stated.
At the interbank market, the naira closed at 199.40 to the dollar, around the peg rate of 197 to the dollar.
According to experts and forex dealers, the naira is expected to weaken further at the parallel market as the dollar shortage persists after the central bank has reduced the sale of greenback.
“The naira will continue to trade at a premium against the dollar on the parallel market as long as dollar supply sources are limited,” one trader said.
The naira had traded at 306 to the dollar at the parallel market two weeks ago.
The President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, said the acute scarcity of dollars was caused by mature forex obligations.
He said, “The spike is due to acute scarcity and payments of credits obligations abroad by importers.”
The naira has continued to drop against the dollar since last month after the CBN banned dollar sales to bureau de change outlets and later stopped daily sales to the interbank market.
The measures, according to the Governor of the Central bank of Nigeria, Godwin Emefiele, are aimed at conserving the nation’s external reserves, which have hit an 11-year low at $28bn.
Beside, the local currency has been under pressure on the back of the falling global oil price.
The overnight lending rates jumped 100 basis points as the movement of naira cash for forex purchases drained liquidity in the financial market, Reuters reported.
The CBN intervenes once a week at the interbank forex market to provide dollar liquidity for some eligible importers.
The interbank rate mirrors the level of naira liquidity in the banking system.
But the main stock exchange index reportedly gained 0.64 per cent to 24,135 points, its highest since January 8, when it fell to 23,000 points from around 27,000.
The report said gains in the shares of petroleum firms Seplat and Mobil helped to lift the market, rising between four per cent and five per cent.
