Nigerian Currency Gains Versus US Dollar Days After Tapping All-Time Low

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The Nigerian currency was trading at around 820 units per dollar on November 8, just days after falling to the worst exchange rate ever against the US dollar, a report said. One economist has suggested that the Central Bank of Nigeria’s controversial currency scheme is unlikely to depreciate the naira or prevent inflation.

EFCC action on currency traders

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Parallel Market Exchange Rate of the Nigerian Currency Vs US Dollar the access From an all-time low – 900 units per dollar – was seen at the beginning of the month to around 805:1 as of November 8. Some reports have attributed Naira’s recovery to action against the Economic and Financial Crimes Commission (EFCC). Suspected illegal forex dealer.

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As reported by News on November 5, the latest quick-fire depreciation of the naira was prompted by the Central Bank of Nigeria (CBN) announcement of new 100, 200, 500, and 1,000 banknotes.

While the central bank’s plan to replace old banknotes with redesigned banknotes has received support from President Muhammadu Buhari, some Nigerian experts, as well as the International Monetary Fund (IMF) warning about the possible consequences of implementing the plan.

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Adding to Naira’s troubles

Still, despite mounting criticism and warnings, CBN is sticking to its guns and will reportedly start issuing new banknotes on December 15 as planned. The central bank has said that all banknotes that are set for demonetisation should be returned on or before January 31, 2023.

However, according to Bismarck Raven, a Nigerian economist, for CBN’s plan to succeed, Nigerian banks would need to exchange banknotes worth more than $105 million (87 billion naira) every day. Apart from adding to Naira’s troubles, Raven Allegedly said that CBN’s Mudra scheme would not solve Nigeria’s inflation problem.

Meanwhile, the currency was still pegged at around 450 per dollar in Nigeria’s official forex market on 9 November, despite falling to record levels versus the greenback in the market parallel to the naira.

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