Dollar Rate Rises As Naira Note Scarcity Hits Nigerian Banks

February 3, 2023
Naira Appreciates At Official Market As Dollar Supply Rises On Friday

The Dollar rate appreciated in the official foreign exchange market on Thursday, 2, February 2023, as Nigerian commercial banks struggle to make Naira available to the public.

According to data obtained from the FMDQ Exchange, the Naira took a beating, losing –0.11 per cent in value, with the Dollar rate rising by N0.50 kobo. 

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In the official window, backed by the Central Bank of Nigeria (CBN), the exchange rate between both currencies rose to N462 per one Dollar, from N461.5 reported the previous trading day. 

During trading, Prime Business Africa learnt that the exchange rate appreciated as high as N462.55/$1, and as low as N423, before closing at N462. 

The decline in Naira’s value follows the unavailability of the redesigned N200, N500 and N1,000 notes in commercial banks, and the struggle at the Auto Teller Machines (ATM). 

Prime Business Africa had reported that banks are not making higher denomination banknotes available, instead offering N10, N20 and N50 over the counter.

Although the central bank has directed banks to release a maximum of N20,000 new Naira notes to customers over the counter, however, customers are still leaving banks empty-handed. 

Due to the scarcity of the Naira, Point of Sale (PoS) operators are buying banknotes from market women and selling to the public at N500 for every N5,000 withdrawal. 

So, traders in the official window and the black market don’t have enough Naira to purchase Dollars at the foreign exchange markets. 

Meanwhile, the Naira appreciated against the British Pound Sterling to N568.32/£1 in the interbank segment on Thursday, falling slightly below the N568.42/£1 a day before. 

But the Euro grew against the Nigerian currency, selling at N507.14/€1 at the close of trading, above the N502.35/€1 reported during the previous trading. 

However, in the Bureau De Change window of the black market, the exchange rate was N752/$1 on Thursday, as the rate maintained its premium level above the official market.

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