The naira looked set to fall to an all-time low of N1000 per dollar at the parallel market yesterday as it closed at N998/$1 and N990/$1 in Abuja and Lagos respectively, according to currency traders, who attributed the naira’s decline to an acute shortage of dollars in the system.

However, the local currency appreciated to N738 per dollar at the Investors and Exporters’ (I&E) window yesterday, compared with N770.71 per dollar on Wednesday, data obtained from FMDQ Exchange shows.

Naira volatility has not abated since the Central Bank of Nigeria (CBN) abolished its currency peg and adopted the willing buyer/willing seller arrangement on June 14, thus resulting in the unification of its multiple exchange rates.

But, according to traders, the sharp decline in the value of the naira at the parallel market in recent days is due to a significant reduction in CBN dollar supplies to the official window.

On an Arise TV business programme , yesterday, financial expert, Chika Mbonu, attributed the naira’s weakness to the CBN’s recent directive to Deposit Money Banks (DMBs) to stop foreign currency-secured naira loans – a practice, the apex bank, said drains dollar liquidity.

Mbonu said that the directive had led to Nigerians moving their forex outside the country, thereby negatively impacting forex liquidity.