Nigeria’s naira plunges to record lows as citizens react to govt’s redesign plan

Nigeria’s currency, the naira, has dropped to a record low against the US dollar as Nigerians scramble to stockpile the greenback ahead of a redesign of naira notes.
It has been just over a week since the Central Bank of Nigeria (CBN) announced its plan to redesign the country’s highest paper denominations – the 200-, 500- and 1,000-naira notes. Although Nigerian authorities are trying to reassure the public by saying replacing the notes will reduce inflation, combat counterfeiting and bring more money into circulation, economic and security experts warn the move could damage Nigeria’s economy. The demand for US dollars has jumped since the announcement and on the black market, the naira has reportedly traded at 860 to the dollar, nearly double the official bank rate.
The new naira notes will begin circulating in mid-December, and the old notes will cease to be legal tender by the end of January, according to the central bank. The CBN says the move will put more money in circulation. Currently, an estimated 85% of all money in Nigeria is stashed away in homes, outside the banking system. The CBN also says the new notes will help authorities curb fake currencies in circulation and keep criminals in check. But experts fault the timing of the decision because the decision during the holiday season and with the elections set for 2023 could harm Nigeria’s economy.