(Bloomberg) -- Nigeria’s naira weakened sharply on the official market against the dollar, pushing it above levels on the unauthorized parallel market despite government promises to stem volatility.

The currency slumped 23% to 1,099 naira per dollar on the official market on Friday, according to Lagos-based FMDQ, amid a local shortage of the greenback. 

That was slightly cheaper than the naira’s level on the parallel market on Monday of 1,190, according to Umar Salisu, a trader who compiles the data in the commercial hub, Lagos.

Liquidity in the official market dropped 48% to $71 million before the weekend, according to the investment bank Chapel Hill Denham.

The weakness was despite news Friday that Moody’s Investors Service had lifted the outlook on Nigeria’s Caa1 credit rating to positive, based on steps the West African nation has taken to improve its fiscal position and shore up foreign reserves.

The naira’s two exchange rates briefly converged in June at around 757 per dollar, after President Bola Tinubu eased complex currency controls to boost foreign investment. But it’s been on a steady slide ever since amid a persistent lack of local access to dollars.

Nigerian Central Bank Governor Olayemi Cardoso in November pledged to clear forward foreign-exchange contracts that have discouraged investor inflows, crimped liquidity and weighed on the currency.

The promise helped to steady the parallel market by encouraging residents who had been hoarding dollars to sell them to avoid losses. But liquidity in the much larger official market has remained constrained.

“Lack of liquidity is causing volatility, challenges in price discovery and stability in the official market,” said Ayodeji Dawodu, head of Africa sovereign and corporate credit research at BancTrust & Co. in London.

While the central bank wants the two rates to converge, at current levels the naira is significantly weaker than the official level of 750 per dollar used as a benchmark for the country’s 2024 budget.

The benchmark exchange rate will be far-fetched, unless “we see significant inflows from foreign investors and government agencies,” Dawodu said.

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