The naira dropped further to N315 against the United States dollar at the parallel market on Wednesday as shortage of foreign exchange, especially the greenback, persists in the forex markets.
As foreign exchange scarcity persists, the nation’s currency, naira has depreciated further to N315 against the dollar at the parallel market.
Traders who spoke to newsmen noted that the naira was exchanged at N310 in the morning but swings higher in afternoon and the fact that it is not available.
However, the local currency had traded for 310 to a dollar on Monday, according, but closed on Tuesday at 199.40 to the dollar on the interbank market, around the peg rate of 197 to the dollar.
This came just as the interbank lending rate rose to two percent from one percent on Monday, after the Central Bank of Nigeria (CBN) had directed commercial banks to fund their naira accounts ahead of its intervention in the forex market on Thursday.
The overnight lending rates jumped by 100 basis points as the movement of naira cash for forex purchases drained liquidity in the financial market. The CBN intervenes once a week at the interbank forex market to provide dollar liquidity for some eligible importers.
The naira had plummeted against the dollar last month after the CBN banned dollar sales to Bureau De Change outlets and later stopped daily sales to the interbank market.
The measures were aimed at conserving the nation’s external reserves, which have hit an 11-year low at $28bn.
“The overnight rate went up today to three per cent in the early trade but declined to two per cent after some banks funded their forex accounts,” forex dealer said.
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