After enjoying a five-day surge, the Nigerian naira faced a setback on Thursday, December 21, 2023, depreciating against the US dollar and closing at N861 per dollar. This represented a 0.85% loss, signaling a shift in the recent positive trend. The decline in value came on the heels of a stern warning issued by the Central Bank of Nigeria (CBN) to banks and Point of Sale (PoS) operators regarding cash scarcity in the country.
The naira’s intraday high touched N1,249 per dollar, further exacerbating its decline, and the day concluded with a 0.85% loss. This equates to a loss of approximately N7.3 compared to the N854.61 per dollar at the close of trading on Wednesday, December 20, 2023.
The official market, represented by the Nigerian Autonomous Foreign Exchange Market (NAFEM), witnessed the naira falling by 0.85% against the dollar. The day’s forex turnover at NAFEM remained at $181.30 million, consistent with the previous day’s figures.
While the official market experienced a dip, the parallel market saw a slight gain for the local currency, trading at N1228 per dollar, reflecting a 0.81% increase. Peer-to-peer exchange rates hovered around N1,193.20 per dollar.
The CBN, attributing the cash scarcity to collusion between bank workers and PoS operators, issued a stern warning against the hoarding of cash. In a statement signed by Hakama Sidi-Ali, the acting director of Corporate Communications, the CBN urged the public to report any unauthorized cash hoarding by banks or PoS agents. The circular outlined alternative payment channels and provided a link for reporting such activities.
This recent development follows a period of optimism as the naira had strengthened against the US dollar for five consecutive days. The currency, which had dipped to over N900 per dollar on December 14, 2023, experienced a commendable recovery, reaching N844.85 per dollar on Tuesday, December 19, 2023. The 5.15% appreciation over the past five days suggests positive momentum, potentially reflecting the impact of CBN reforms.
As the currency landscape continues to fluctuate, stakeholders will be closely monitoring developments and the effectiveness of measures taken by the CBN to stabilize the naira’s value against foreign currencies.
