Dollar Rate Falls, As Two Governors Disagree Over CBN’s Cash Withdrawal Limit

On Monday, the naira finally gained against the United States dollar (USD) in the official exchange market, after four days of depreciation in the value of the Nigerian currency.

At the end of business hours on December 12, the exchange rate between both currencies stood at N446/$1. This was in contrast to the N446.50/$1 they exchanged last week Friday.

This indicates that the dollar rate fell by -0.11 per cent, with traders exchanging $78.08 million in the Investors & Exporters window.

The value of foreign exchange transacted on Monday fell by 51.9 per cent or $84.09 million from the $162.17 million FMDQ securities reported the official exchange market recorded during the previous session.

Also, the dollar rate depreciated in the black market, as the exchange rate in the Bureau De Change window dropped by N3, as buyers of the United States currency part with N740/$1. 

The black market exchange rate fell below last week Friday’s N743/$1, reflecting the rates in both the official and parallel market moved in agreement on Monday. 

Nigerian governors disagree over CBN’s cash withdrawal

The naira’s gain against the dollar on Monday, follows Governor Aminu Masari of Katsina state throwing his support behind the new policy on cash withdrawal limit introduced by the Central Bank of Nigeria (CBN).

Governor Masari had stated on Saturday that majority of governors are in support of the cash withdrawal, despite criticism from Adamawa State governor, Ahmadu Fintiri. 

Masari said, “It will help the economy. Now, all the money has not been in the banking sector. The central bank governor said that they have mopped over One Trillion Naira (N1 trillion) into the banking sector which was starched in soak-ways and other places. 

“We believe by the end of the transition to the new currency, the remaining trillion will be back in the banking sector. I think it is very good for the economy.” 

However, governor Fintiri said the policy will increase poverty rate in Nigeria and it is also targeted at the political class, “What is breeding poverty? Economic policies. Look at the one that is about to be implemented by the Central Bank which would further throw the country into poverty.” 

He added that, “Nobody is saying the economy shouldn’t be cashless. Take time and do it systematically. We shouldn’t do it as if some people wanted to be politicians and they were denied the opportunity, then they use their office to punish the politicians.