In a surprising turn of events, the Nigerian naira rebounded on Thursday, November 16, 2023, following a two-day dip earlier in the week. Official data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) revealed that the naira gained N31.23 or 3.81%, closing at N818.99/$1 by the end of the day. This positive shift came after the currency closed at N850.22/$1 on Tuesday.
Contrary to the official market, the unofficial market reported no change in the naira’s value, maintaining its position at N1140/$1. This development occurred amidst reports of a surge in Nigeria’s inflation rate, reaching 27.33% in October 2023, according to data from the National Bureau of Statistics. This marked a 0.61% point increase from September’s 26.72%, with a year-on-year headline inflation rate rising by 6.24% points.
A pervious report highlighted the Central Bank of Nigeria’s (CBN) claim that its monetary policy reforms are beginning to bear fruit. Isa AbdulMumin, the Director of Corporate Communications Department at the CBN, pointed to the recent inflation data as evidence that the bank’s stance on tightening monetary policy and implementing money market reforms is yielding the desired effects.
In related news, the CBN made a significant announcement on Monday, November 13, 2023, regarding the withdrawal of old naira notes from circulation. Contrary to its previous stance, the CBN reversed the December deadline, allowing old N200, N500, and N1,000 notes to remain legal tender alongside the newly redesigned notes until they gradually phase out of circulation.
This decision, reported by Legit.ng, has sparked controversy as some financial experts argue that it contradicts a Supreme Court directive, which mandated the phasing out of old notes by December 2023. Despite the debate, the CBN stands firm on its decision, citing reasons for the indefinite extension of the legal tender status for the old naira notes.
As the naira experiences fluctuations and the CBN implements policy changes, stakeholders and financial experts continue to closely monitor the economic landscape for further developments.