Naira crashes as CBN introduces new withdrawal limits

December 7,2022

The value of the Naira went down on Tuesday at the forex change markets after the Central Bank of Nigeria (CBN) introduced new cash withdrawal limits via over-the-counter (OTC) and other channels.

CBN on Tuesday announced that it was limiting cash withdrawals at OTC N100,000 for individuals, with a 5 per cent processing fee for amounts above the cap. For corporate organisations, the limit is N500,000, with a 10 per cent charge for amounts above the limit

Limitations were also placed on Automated Teller Machines (ATMs) with a daily limit of N20,000 and instructions to load only N200 and low Naira denomination In ATMs

This new policy affected the value of the Naira from Peer-to-Peer (P2P), the parallel market, and the Investors and Exporters (I&E) windows.

In the parallel market, the local currency depreciated against its US counterpart by N5 to close at N730/$1 compared with the preceding day’s value of N725/$1.

Also, at the P2P FX window Naira exchanged with the Dollar at N760/$1 compared with the previous day’s N739/$1, indicating a decline of N21.

Also, in the I&E window, the Naira depreciated against the greenback by 47 Kobo or 0.11 per cent to trade at N445.80/$1, in contrast to the preceding session’s value of N445.33/$1.

This happened amid a jump in the FX turnover for the trading day by 200.2 per cent or $120.23 million to $180.29 million from Monday’s $60.06 million, according to data from FMDQ Securities Exchange

Similarly, Naira plunged against the Pound Sterling yesterday by N4.82 to settle at N547.15/£1 versus N542.33/£1, and against the Euro, it fell by N5.80 to close at N470.78/€1 compared with the previous day’s rate of N464.98/€1