Naira in another record drop as CBN moves to replace naira notes

by Nigerian slangs and their meaningKalu Odinakachi

Naira depreciated significantly against the US dollar in both the official and unofficial markets on Friday. This is less than 48 hours after the Central Bank of Nigeria announced the replacement of naira notes.

Official market rates published on the websites of FMDQ, where the currency is officially traded, showed the naira closed at N444.75 per dollar on Friday, the lowest rate it has ever traded in the segment.

This represents a 0.06 percent devaluation of the previous market value with $61.89 million recorded as foreign exchange turnover within this period.

In the unauthorized street market of the Nigerian states, the gallop of the dollar against the dollar persists.

The dollar fell to N780.00 per $1 on Friday against N778. 00 traded on Thursday and sold for N783.00$1, currency dealers in Abuja said.

Analysts say the major bank’s move is the reason behind the Naira’s further devaluation on the black market, as illicit fund holders try to convert cash stacked outside banks into dollars, further driving up the exchange rate.

“The rush to get rid of banknotes that are out of the banking system ahead of the deadline is what is likely causing renewed pressure on the exchange rate,” said Damilare Ojo, Investment Research team leader at Meristem Securities Limited.

He said that the demand for dollars will continue to increase in the short term and that this will put even more pressure on the parallel market rate.

“So, in the short or short term, I expect more pressure on the value of the Naira on the black market,” he added.

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