The Nigerian naira witnessed a welcome appreciation against the dollar on Wednesday, as the demand for the greenback showed signs of moderating in the foreign exchange (FX) market. In some FX trading areas across the country, the naira stabilized at N867 per dollar, while in others, it held strong at N850 to N860 at the parallel market.
A black market operator informed BusinessDay that the demand for dollars has eased since the beginning of the week, contributing to the naira's positive performance.
Meanwhile, at the Investors' and Exporters' (I&E) forex window, the naira marginally appreciated by 0.07 percent, with the dollar quoted at N791.42 on Tuesday compared to N792.04 on Monday, according to data from the FMDQ.
The daily foreign exchange market turnover also saw a slight increase of 4.22 percent to $51.55 million on Tuesday, up from $49.46 million recorded on Monday. Willing buyers and sellers maintained bids as high as N845/$1, stronger than the N855.00 bid seen on Monday. However, the market auction recorded lower bids of N730.00, weaker than the N650.00 bids maintained on Monday at the I&E window.
In other news, the Central Bank of Nigeria (CBN) revealed plans to gradually phase out old N200, N500, and N1,000 notes as it issues new naira notes. Folashodun Shonubi, the acting governor of the CBN, disclosed this during a press briefing on the outcome of the two-day Monetary Policy Committee (MPC) held in Abuja on Tuesday.
Shonubi stated that the replacement process would be gradual and conducted without fanfare. Whenever commercial banks request new currency, the old notes will be exchanged for the new ones, ensuring a smooth transition. He emphasized that the old notes would gradually be replaced over time, and the public would observe the shift from old to new notes without any abrupt changes.
It's worth noting that on October 26, 2022, Nigeria's banking and finance sector regulator decided to redesign the N200, N500, and N1,000 notes, the country's high-value currency, with the approval of former President Muhammadu Buhari. The redesigned naira was introduced on December 15, 2022, which led to a cash crunch across the nation due to the controversial deadline for phasing out the old naira. The CBN extended the deadline to February 10, 2023, and later the Supreme Court intervened, setting the final deadline to December 31, 2023.
