After trading at N890/$1 at the parallel market otherwise known as the black market on Friday, Naira appreciates against the US dollar at the opening of trade on Monday.
The gain is a result of the increase in Dollar supply in the forex market on Monday. Unlike last week when dollar scarcity forced the naira to an all-time low against the US dollar and British Pound, traders confirmed enough dollar supply to ease demand pressure.
In Lagos, the naira to dollar exchange rate traded between N850 and N870/$1 at the opening of trade on Monday while it traded between N840 and N860/$ at the close of the market.
This represents about a 5.94 percent increase when compared to N890 it exchanged on Friday while it represents a 1.16 percent gain when compared intraday figure of Monday.
Investors King understands that the naira has been depreciating heavily following the central bank’s announcement to redesign a portion of the currency notes.
It would be recalled the Central Bank of Nigeria disclosed it will issue redesigned N100, N200, N500, and N1000 notes to address counterfeiting and hoarding.
Following the disclosure, several Nigerians who have large deposits of naira at home trooped to the bank to change their naira notes to dollars in order to beat the December deadline. This circumstance led to huge demands for dollars.
Meanwhile, the Central Bank has disclosed that it has finalised arrangements for the new currency to begin circulation on December 15, 2022, after it would have been launched by President Muhammadu Buhari.
According to the apex bank, the new and existing currencies will remain legal tender and circulate together until January 31, 2023, when the existing currencies shall cease to be legal tender.
However, the redesign of the naira has been characterised by a number of dramas, part of which was the position of the Minister of Finance, Budget and National Planning, Zainab Ahmed.
The minister stated when she appeared before the Senate Committee on Finance that her Ministry is not aware of the plan to redesign some naira notes.
Similarly, a number of experts have cautioned the apex bank stating that while redesigning a portion of the naira note is not bad, the timing could however further hurt the economy.
