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BREAKING: After CBN Announced Replacement Of Notes Naira Falls Massively Against Dollar

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BREAKING: After CBN Announced Replacement Of Notes Naira Falls Massively Against Dollar

After CBN Announced Replacement Of Notes Naira Falls Massively Against Dollar

Naira fell significantly against the U.S. dollar at the parallel market on Thursday, a day after the Central Bank of Nigeria (CBN) said it will withdraw higher notes to check fraud, inflation and insecurity.

Black market exchange rates across states showed the naira exchanged hands with the greenback at N775.00 and above for a dollar, and sold at N781.00 in Abuja.

This implies a 2.64 per cent devaluation from N760.00 it traded in the previous session on Wednesday.

Likewise, currency dealers at the Uyo Udi street market said the hard currency was exchanged at N766.00 and sold at N775.00 to a dollar on Thursday.

“The banks are not giving US dollars, individuals are only struggling to get on their own, that’s why the rates are high and irregular,” a currency dealer in Uyo said.

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This occurred less than 24 hours after the Central Bank of Nigeria announced that it has redesigned all major naira notes and will by December 2022 start circulating them.

The apex bank said affected currency denominations are N100, N200, N500, and N1000, and that the move would enable them to have absolute control of the currency in circulation, manage inflation, as well as tackle counterfeiting.

“Although global best practice is for central banks to redesign, produce and circulate new local legal tender every 5–8 years, the Naira has not been redesigned in the last 20 years.

“On the basis of these trends, problems, and facts, and in line with Sections 19, Subsections a and b of the CBN Act 2007, the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels,” the CBN governor, Godwin Emefiele, was quoted to have said while briefing journalist on Wednesday.

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The Economic and Financial Crimes Commission welcomed the move, saying it will monitor as Nigerians exchange notes and watch for money laundering.

Analysts expect holders of illicit funds may try to offload cash stacked outside of banks, by buying up scarce dollars, further driving up the exchange rate.

Despite the rise at the parallel market, naira maintained stability at the official window on Wednesday, data published on FMDQ websites, where forex is officially traded, showed.

The currency, which opened trading at N440.20 per $1 at the over-the-counter window on Wednesday, closed at N441.67 per dollar, the same rate recorded on Tuesday.

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