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Total Amount of Naira in Circulation Falls by 53 Percent as Cash Crunch Worsens in Nigeria

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Naira Dollar Exchange Rate - Investors King

The latest data from the Central Bank of Nigeria (CBN) has revealed that total amount of currency-in-circulation has fallen by 53.33 percent since October last year to January, this year.

The data, contained in a report presented by the CBN Deputy Governor, Folashodun Shonubi, at a forum in Abuja, indicated that the cash in circulation decreased from N3.3 trillion to N1.54 trillion.

It was gathered that the 53.33 decrease in the cash within the public space was due to Nigerians’ high compliance to the order by CbN for bank customers to deposit their old N1000, N500 and N200 notes before the bank’s February 10, 2023 controversial deadline.

Bank customers had thronged commercial banks with the old notes and deposited them with the expectation that the new notes would be within their reach.

Investors King had reported the anguish, pain and hardship that majority of Nigerians are passing through following the scarcity of the new redesigned currency.

The biting shortage of the new naira notes has severely affected commercial activities across the country as small and medium-scale business owners have been lamenting low sales while some have closed up their businesses including Point of Sales operators.

The CBN Governor, Godwin Emefiele, had said one of the objectives of the naira design policy was to mop up currency outside the bank vaults which he put at N2.7tn. He had said with such a huge amount outside the banking system, it would be difficult for monetary policy initiatives to impact the economy.

While citizens lament hardship caused by the naira redesign policy, President Muhammadu Buhari, in an attempt to reduce the problem in getting the naira, had ordered CBN to re-circulate the old N200 notes to the public, and declared that the old N500 and N1,000 banknotes were no longer legal tender in the country.

Since the President gave the new order concerning the N200 old notes, bank customers have complained that the old notes was yet to be released to them.

Customers were seen crowding banks for naira even as some banks remain shut

It could be recalled that some state governors had directed their residents to continue spending the old notes in line with an order of the Supreme Court.

But checks revealed that traders and transporters in several states across the country have insisted on collecting only new naira notes and old N200 note in line with the directive of President Buhari.

Some traders and commercial transporters have been rejecting bank transfer even as online transactions have been problematic for Nigerians.

Many Nigerians have lamented hitches in transacting online as they said that their transactions have not been successful while others use fake alerts for unsuspecting traders.

In the midst of the crisis, Nigerians continue to throng the apex bank to return their old notes while others hold on to theirs with the hope that the Supreme Court judgment would win and ordered the usage of the old currency.

Financial experts have called on the Federal Government to do more in assaulting the suffering of the masses, saying the N200 old notes order could be helpful if it’s made available.

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Naira

Nigeria Hits Historic High as Currency in Circulation Surges to N3.69 Trillion

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Nigeria’s currency in circulation surged to a historic high of N3.69 trillion, according to data released by the Central Bank of Nigeria (CBN).

This figure represents an increase of N43.07 billion or 1.18 percent from the total of N3.65 trillion reported in January 2024 and a 13.64 percent year-on-year rise from N3.25 trillion reported in February 2023.

Currency in circulation encompasses the physical cash, including paper notes and coins, actively used in transactions between consumers and businesses within the country.

The latest statistics indicate a considerable uptick in the availability of cash within the Nigerian economy.

The surge in currency supply comes amidst lingering concerns over a potential cash crunch following the monetary policy adjustments by the CBN, particularly the aggressive tightening stance of the Monetary Policy Committee (MPC).

Analysts attribute this spike to various factors, including the fear factor stemming from the cash crunch experienced in 2023 and lingering uncertainties surrounding the administration of physical currency.

Despite the surge in currency in circulation, Nigeria’s economic growth remains sluggish, with projections indicating growth rates of around 2.9 percent to 3.1 percent for 2024.

Also, inflation remains a significant concern, with the headline inflation rate climbing to 31.70 percent in February 2024 from 29.9 percent reported in January 2024, according to data from the National Bureau of Statistics (NBS).

The CBN’s proactive approach to monetary policy, including a historic increase in the monetary policy rate (MPR) to 24.75 percent, underscores the central bank’s commitment to addressing economic challenges and fostering stability amidst persistent pressures.

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Naira

Nigerian Naira Surges to N1,350 per Dollar in Parallel Market

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New Naira notes

The Nigerian Naira has appreciated to N1,350 per dollar in the parallel market, a significant gain from its previous rate of N1,430 per dollar just a day earlier.

Similarly, in the Nigerian Foreign Exchange Market (NAFEM), the naira strengthened to N1,382.95 per dollar, indicating an upward trend across key forex segments.

Data from FMDQ revealed that the indicative exchange rate for NAFEM fell to N1,382.95 per dollar from N1,408.04 per dollar on the previous day, representing a gain of N25.09 for the naira.

This surge in the naira’s value has widened the margin between the parallel market rate and NAFEM to N32.95 per dollar from N21.96 per dollar previously.

Analysts attribute this impressive surge to recent foreign exchange reforms implemented by the Central Bank of Nigeria (CBN).

These reforms, including the consolidation of exchange rate windows and liberalization of the FX market, have contributed to bolstering the naira’s strength against the dollar.

The CBN’s proactive measures aim to promote stability, transparency, and liquidity in the foreign exchange market, fostering confidence among investors and strengthening the national currency.

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Dollar to Naira Black Market Today, March 26th, 2024

As of March 26th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,430 NGN in the black market, also referred to as the parallel market or Aboki fx.

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New Naira notes

As of March 26th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,430 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,450 and sell it at N1,440 on Monday, March 25th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate improved slightly when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

  • Buying Rate: N1,430
  • Selling Rate: N1,420

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