Naira Gains Against Dollar, As Exchange Rate Falls In Black Market, Official Window

Naira Gains In Official Market As Dollar Rate Falls Ahead Of CBN Deadline

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The naira appreciated in the official market on Tuesday, December 3, 2023, as the Central Bank of Nigeria (CBN) backed foreign exchange channel resumed for forex trading.

After trading hours, the dollar exchanged for the naira at N461/$1, indicating the United States currency depreciated in value by -0.10 per cent.

Data obtained from the FMDQ Exchange indicated that the cost of buying one dollar fell by N0.5kobo when compared to the N461.5 both currencies exchanged for last week Friday.

Note that the official market was on break on Monday, January 2, 2023, due to the public holiday celebrating the New Year.

Prime Business Africa gathered that the exchange rate between the naira and the dollar went as high as N462/$1 during trading on Tuesday and as low as N440/$1 before closing the session at N461.

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The naira’s appreciation comes as the deadline to phase out the old currency nears. Recall that the central bank had stated that the old currency will cease to be a legal tender come January 31, 2023. 

Nigeria’s central bank has ignored calls to extend the deadline, having given just three months for the phase-out, compared to the United Kingdom’s apex bank, which gave citizens of the country two years’ timeframe. 

On the CBN’s website, it is stated that 26 days is left for the current series of N200, N500 and N1,000 notes to remain a legal tender. 

However, despite the closeness of the period, Nigerian banks are still dispensing old naira notes to the public through the Auto Teller Machines (ATMs), over the counter, and also point of Sale (PoS) or banking agents. 

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“Since December 15, 2022, more than two weeks after the CBN began distributing the new naira notes via the banks, you hardly find them in circulation. The bulk of cash withdrawals from the banks and POS agents are still done in old naira notes. 

“It appears the banks have been hoarding the new naira notes for distribution to their high-net-worth customers most of whom are politicians, especially this festive period,” the former Imo State Commissioner for Finance, Uche Uwaleke, told This Day.

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