Presidential election: Naira Plummets to Lowest Level against Dollar in 2023

The naira/dollar exchange rate dropped to its lowest point since November 2022 as the 2023 presidential election enters its last two weeks of campaigns.

Checks by Nairametrics reveal the greenback sold for as high as?N755/$1 on the black market on Friday, February 10th, 2022. Meanwhile, the exchange rate on the official I&E Window closed at N461.5/$1 representing a difference of about?N293.5?over the black market rate.

The lack of new naira notes has raised concerns among Nigerians and added to the country’s increasing list of economic issues, posing a new challenge to Nigeria’s economy.

• The scarcity is attributed to the old naira notes policy, which mandated that all Nigerians swap their old notes for new ones by February 10th.
• While the policy was intended to tackle corruption and counterfeiting, it has had unintended consequences.
• Many Nigerians have been unable to exchange their old notes, leading to a shortage of new naira notes in circulation.

The President of BDC operators otherwise known as ABCON, Alhaji (Dr) Aminu Gwadabe, informed Nairametrics via a text message that the currency redesign is yet to impact positively on the demand side of the currency exchange market as supply is still very much limited.

• “Yes, incidentally the naira redesigned has not impacted positively on the value of the local currency against the greenback as there is a paucity of liquidity in the market”

Another operator who spoke to Nairametrics on the condition of anonymity stated that the surge in demand was due to the impending 2023 elections as politicians had already mobbed up forex in the market.

• “Most of the forex that would have been available have already been bought by politicians in October ahead of the elections. That is why the exchange rate depreciated massively at the time.

Another operator opined that despite the recent depreciation, the exchange rate was still fairly stable and is trading between the plus or minus 2-3% band.

On the CBN policy to swap old naira notes for new, some BDC operators, who wished to remain unnamed, expressed their frustration with the current situation.

• “The scarcity of new naira notes has created a lot of problems for the economy,” said one of the operators. “Most of our customers already transfer into our accounts but some of us still cash to pay for daily cash-based expenses important to running a business. Some of our staff still rely on public transportation to get by.”Another operator added,
• “This situation is unacceptable, and we hope that the latest intervention by the council of state will help to address the issue as soon as possible. While the policy to go cashless is a welcome development, it needs time and careful planning to deliver the rewards. As things stand, time is short and the planning has been short of a disaster.”