Naira Loses N5 After Unveiling of Redesigned Notes by Buhari

By Dipo Olowookere

The parallel market segment of the foreign exchange (forex) market in Nigeria has reacted negatively to the unveiling of the redesigned Naira notes by President Muhammadu Buhari on Wednesday.

This morning, Mr Buhari revealed the new N200, N500, N1,000 notes at the weekly Federal Executive Council (FEC) meeting held at the Presidential Villa in Abuja.

This has started to generate mixed reactions from Nigerians, with some expressing disappointment at the development, claiming that it was purely a change in the colour of the banknotes.

Business Post reports that at the black market this afternoon, the value of the Naira to its United States counterpart depreciated by N5 to trade at N780/$1 compared with the N775/$1 it was traded on Tuesday.

The country has still been unable to overcome its FX liquidity problems, which have put the local currency under pressure as the supply has not been able to meet demand.

Recall that the Nigerian currency went into a free-fall for a few weeks after the Central Bank of Nigeria (CBN) said on October 26, 2022, that it was redesigning the domestic currency.

It had said the new notes would be in circulation from December 15 and that the old banknotes would seize to be legal tender in Nigeria from February 1, 2023.

There were calls for an extension but yesterday, after the Monetary Policy Committee (MPC) meeting in Abuja, the Governor of the CBN, Mr Godwin Emefiele, said there would not be an extension to the January 31, 2023, deadline for the exchange of the old notes for the new notes.

Yesterday, the Naira appreciated against the Dollar in the black market by N5 to N775/$1 from N780/$1, but the gains have evaporated after the latest development.

It is not certain if these will be recovered in the coming day, but some financial experts, including Mr Sakiru Adediran, have said it is too early to say for now.

“It is too early to judge the effect of the new Naira notes on its value at the black market, but I do not see it strengthening the value of the Naira,” he said when contacted by this newspaper for his expert opinion.