By Dipo Olowookere
The value of the Naira to its United States counterpart, the Dollar, further depreciated to an all-time low of N810/$1 on Monday in the parallel market segment of the foreign exchange (FX) market.
This was driven by the persistent demand for the Dollars as efforts are being made to convert the Naira to hard currencies after the Central Bank of Nigeria (CBN) announced the redesigning of the N200, N500, and N1000 notes.
Those who had kept a huge sum of the local currency outside the banking system are trying hard to use the black market to change the funds into Dollars.
Last Wednesday, the apex bank said it would introduce the new banknotes on December 15, 2022, and would expect the old notes to be out of circulation by January 31, 2023.
This has mounted pressure on the domestic currency, and over the week, it weakened to N800/$1 before further declining by N10 on Monday morning to N810/$1.
The significant rush for the US Dollar, which had been scarce over the past weeks, further drove speculative activities in the parallel market.
Last week, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, kicked against the policy, warning that there would be severe consequences on the nation’s economy.
She made this comment when she said the central bank did not consult her Ministry before announcing the Naira redesign.
The CBN had said it got the approval of President Muhammadu Buhari to change the design of the Nigerian currency.
On Sunday, Mr Buhari confirmed this when he said he was convinced of the benefits of the action to the economy, which some observers said was dwindling.
The President said those who will have issues with the policy are “People with illicit money buried under the soil,” noting that “workers, businesses with legitimate incomes will face no difficulties at all.”
Recall that last Friday, the Naira lost N16 to trade at N785/$1 compared with the rate of N769/$1 it was sold a day earlier.
