Naira drops to 318 perdollar as stocks rise

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.