The naira weakened for a third straight day after hitting three-month highs as the Central Bank of Nigeria (CBN) on Tuesday offered dollars to operators of bureau de change at 1,021 naira.
That is 17% below than the official rate tracked by FMDQ, as the CBN seeks to improve liquidity in the parallel market.
The naira dropped 5.3% against the dollar on Monday to halt a performance that had briefly elevated it to the best performing currency in the world, according to Lagos-based FMDQ.
On the unofficial market, it fell 6% to extend the retreat of the past three trading days to 17%.
The currency has lost more than 60% of its value against the dollar following two devaluations since June to reform the foreign exchange market and attract more foreign capital. The central bank has also introduced a raft of measures to prod lenders to supply more dollars to the local market.
The steps have helped the naira to recover from a 1,627 per dollar low in early March to 1,234/dollar on Monday on the official market, which is the most recent day for which data are available.
Traded volume at the foreign exchange market dropped to a two-month low of $86 million at the weekend before rising 27% to $110 million on Monday. But the supply proved insufficient, prompting the naira to soften while excess demand shifted to the unofficial market.
The West African nation’s gross dollar reserves has fallen steadily for 17 days to $32 billion as of April 19, the lowest the reserves have been since Sept. 2017
The trend has raised concerns that dollar inflows are not arriving quickly enough to rebuild reserves after the central bank settled overdue dollar obligations earlier this year.
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