Naira falls as CBN reverses directives on old notes

NAIRA value on Monday, March 13, suffered slide against other foreign exchanges as Central Bank of Nigeria announced continued recognition of old N200, N500 and N1000 naira notes as legal tender in the country in line with Supreme Court order.

  The naira fell to the dollar in the official market by 0.04 per cent and also shed N2 of its value in the unofficial market The CBN has given a directive to banks to accept, and pay in old N1000, N500, and N200 naira notes.

  The Nigeria’s currency depreciated against the US dollar at the official and unofficial foreign exchange (FX) markets, as the Central Bank of Nigeria finally directs banks to accept old naira notes. The Naira’s poor performance against the US dollar in the parallel market, Peer-to-Peer (P2P), and Investors and Exporters (I&E) window(the official market).

  Data from FMDQ securities where the naira is officially traded showed that its value declined by 17 Kobo or 0.04 percent against the dollar to settle at N461.67/$1 on Monday, compared with the previous exchange rate of N461.50/$1.

  Naira value at unofficial market At the P2P segment, traders exchanged their local currency for the American currency at an average rate of N754/$1 on Monday, March 13, compared to the previous rate of N752/$1, indicating a decline of N2.

  It was a similar situation in the black market, where the local currency lost N2 against the US currency to settle at N746/$1, in contrast to N744/$1 it traded on Friday, March 10.

  In the interbank segment of the market, CBN data showed that the naira also witnessed a drop in value against the Pound Sterling by N9.48 to exchange at N557.49/£1 from N548.01/£1. It was the same against the Euro, naira lost N5.48 to close at N492.59/£1 from the previous rate of N487.11/£1. CBN obeys Supreme Court Meanwhile; the CBN has finally obeyed the Supreme Court judgment on old naira notes.

  CBN in a circular signed by its spokesman Isa Abdul Mumin noted that it met with the Bankers’ Committee and has directed that the old N200, N500 and N1000 banknotes remain legal tender alongside the redesigned banknotes till December 31, 2023. CBN spends N58.61billion to print 2.518 billion Naira notes Further reports disclosed that the Central Bank of Nigeria has spent N58.61 billion printing naira notes for circulation in the country. According to CBN, 2.51 billion pieces of banknotes of various denominations were printed to satisfy the currency needs of the economy The amount spent in 2020 for printing is a significant drop compared to what CBN spent in 2019 and 2018.