Business
Redesign: Naira Depreciates Heavily After CBN Announcement
The decision by the Central Bank of Nigeria (CBN) to redesign higher denominations of the Naira, the country’s currency, has significantly increased demand on the foreign exchange market according to investigations.
As more people look to buy dollars to exchange their stashed naira notes, the naira has depreciated even further in the black market.
Checks revealed that on Friday, street vendors exchanged dollars for N780 in local currency.
This represents a 4.13 percent decrease when compared to the N753 reported previously.
The official window exchange rate for the Naira was 444.50 to the USD, according to FMDQ Securities.
This represents a 0.64 percent decrease from the previous exchange rate of N441.67 to the dollar.
On Thursday, the open indicative rate was N441.25 to the dollar.
The highest rate recorded during the day’s trading was N450.06 before it settled at N444.50.
During the day’s trading, the Naira fell as low as 425 to the dollar.
On Thursday, the official Investors and Exporters window saw a total of 100.90 million dollars traded.
Recall that Senator Opeyemi Bamidele told the Finance Minister that the CBN’s policy had begun to have an impact on the value of the Naira in relation to the US dollar only two days after it was announced.
“Just two days after the policy was announced, the value of the Naira to a US dollar rose from N740 to N788 to a US dollar due to a massive rush to exchange Naira for Dollars,” he said.
To me, the policy may be well-conceived, but the timing, based on realities on the ground, is very wrong, as the Naira may fall to as low as N1,000 to the US dollar before the policy’s full implementation date of January 31, 2023.”
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