The exchange rate between dollar to naira the Nigerian currency unit has reportedly remained stable for about four days now, despite huge demand for dollar on Xmas day.
Our correspondence in Abuja reports that, currency traders who operates opposite Sheraton hotel are currently paying N720 per $dollar on December 25th (Xmas day) apparently showing that the Nigerian currency remained stable for about four days.
The exchange rate surged massively at the parallel Market in October and early November this year when the CBN announced the redesign of the Naira. This prompt a high demand for foreign currencies as people were holding huge sums in cash. So in order to avoid wastage of the currency, they had to buy foreign currencies and keep cash.
Why redesign the Naira?
The main goal of currency redesign is to achieve specific goals such increasing banknote security, minimizing counterfeiting, protecting the nation’s common heritage, managing the amount of money in circulation, and lowering overall currency management costs.
On October 26, 2022, the Central Bank of Nigeria (CBN) announced its plan to redesign the Naira, and its governor, Mr. Godwin Emefiele, made it clear that one of the main goals of the exercise was to give the CBN control over the currency in circulation.
The three biggest note denominations in the country’s currency—the N200, N500, and N1000—would be impacted by the exercise, he claimed.
He claimed that roughly 85% of the country’s money was in circulation outside of the banking system and that the CBN would not permit this condition to persist since it was negatively influencing the CBN’s monetary policy.
