In Nigeria, the exchange rate gap between the official and black market has widened as US dollar challenges persist. Government effort to drive foreign currency inflow has yet to yield results.

The Nigerian naira struggled to keep value across the foreign exchange markets on Tuesday amidst a steep increase in demand for the US dollar ahead of Yuletide. Data from FMDQ showed that the naira depreciated by 6.5% to N850.22 at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

Demand for foreign currency rose as manufacturers, and importers plan for seasonal business activities, MarketForces Africa gathered from discussions with some business owners.  In the parallel market, the local currency also depreciated by 0.44% to N1,145 per US dollar amidst a new rally in the crude oil market.

Brent crude increased by 1.19% to $83.5 per barrel, while the West Texas Intermediate (WTI) crude oil also rose by 1.25% to $79.24 per barrel.   In a notice obtained by MarketForces Africa, the Central Bank of Nigeria (CBN) has announced a decision to recognise old naira notes as legal tender without time restriction.

It recalled that the apex introduced the redesign of N200, N500 and N1,000 denominations in October 2022 and certain deadlines were set for the old design of these denominations to cease as legal tenders.

The CBN said without prejudice, that it wishes to inform the general public of its desire to extend the legal tender status deadline of the old design of N200, N500 and N1,000 denominations, ad infinitum.

“This is in line with international best practices and to forestall a repeat of earlier experiences”, the apex bank said. According to the statement, all banknotes issued by the CBN in accordance with Section 20(5) of the CBN Act 2007, will continue to remain legal tender, ad infinitum, even beyond the initial December 31, 2023, deadline.

The CBN said it is working with the relevant authorities to vacate the subsisting court ruling on the same subject. Accordingly, all CBN branches across the country will continue to issue and accept all denominations of Nigerian banknotes, old and redesigned, to and from deposit money banks (DMBs). 

The general public is enjoined to continue to accept all Naira banknotes (old or redesigned) for day-to-day transactions and handle these banknotes with utmost care, to safeguard and protect the lifecycle of the banknotes. The apex bank also advises the general public to embrace alternative modes of payment, e-channels, for day-to-day transactions. Naira Devaluation Deepens Economic Crisis in Nigeria

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ogochi Ndubuisi is creative content manager with interest in marketing and advertisement. Ogochi supports MarketForces Africa's clients corporate communication units with content development and liaise with media unit for disseminable product information.