CBN worries about banks’ reluctance to return old currencies to vaults and pledges to enforce the cashless policy.
After President Muhammadu Buhari and the Central Bank of Nigeria (CBN) unveiled the new naira notes yesterday, the currency strengthened on the black market. The exchange rate between the two currencies dropped to N780 to the dollar on Wednesday night, according to a currency broker in Lagos State’s Ogba neighborhood.
According to findings by New Telegraph, the exchange rate for the US dollar on Tuesday night was N785, which means the naira strengthened by 0.6% and the value of the dollar decreased by N5.
The merchant observed that the release of the new naira notes, which had new colors but kept the old notes’ images, designs, and inscriptions, coincided with the decline in the value of the dollar.
There were rumors that the central bank’s move to redesign the naira would result in too many naira chasing too few dollars on the black market, where some people frequently purchase dollars because they can’t handle the pressures of the official exchange rate.
Keep in mind that Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria, once said that “people who are holding huge amounts of cash outside the banking system for nefarious reasons will go to the parallel forex market to buy hard currency, putting further downward pressure on the value of the naira as too much naira would be chasing too few dollars.”
However, since CBN revealed its plan to change the naira, the Nigerian currency has been fluctuating in the black market for a number of reasons.