The Association of Bureau De Change Operators of Nigeria (ABCON) has predicted that the naira exchange rate would increase after the ongoing redesigning of some denominations of the country’s currency, which will take place after the deadline of January 31, 2023, to stop the circulation of old Naira notes.
The Central Bank of Nigeria (CBN), according to ABCON President Mr Aminu Gwadabe, is likely to “narrow the gap between the flexible versus fixed exchange rate to flood the market with capital inflows,” he predicted in a message on his Whatsapp status.
Gwadabe buttressed that his outlook for the naira in 2023, was that the naira redesign measure would help the CBN to mop up significant proportions of the naira outside the banking vault, which hitherto was “putting pressure on the fragile exchange rate volatility in the parallel market as the demand surge witnessed only spurious and began to thin out gradually.”
He added: “With this scenario and the expectations of the central bank to reduce the gap between the fixed and the parallel market to encourage the critical foreign inflows as a significant liquidity source to strengthen the naira.
“The envisaged liquidity will flood the market as we witnessed in 2016 when they established the I&E window to attract foreign inflows in the market for investment into our vast natural resources.
On October 26, CBN Governor, Godwin Emefiele announced a redesign of the currency in three different denominations: N200, N500, and N1,000.
The new banknotes will go into circulation on December 15, 2022, according to the CBN governor, who noted that the shift was a result of the president’s consent.
He had said the development was also aimed at checking the increasing ease and risk of currency counterfeiting evidenced by several security reports, and the increased risk to financial stability as well as the worsening shortage of clean and fit currency, with the attendant negative perception of the central bank.
Meanwhile, the exchange rate between the Naira and the US dollar according to the data posted on the Central Bank of Nigeria (CBN) Currency Exchange Rate is 443.16/$1, while on the black market the Naira goes from N775 to a Dollar.
The Naira exchange rate to the British Pound Sterling at the parallel market steadies at N870 and N805 to one Euro. At the official market, the Naira is 525 to the Pound Sterling, while the Euro goes for N458.7
