The Nigerian Foreign Exchange Market (NAFEM) experienced heightened demand pressure,
largely driven by foreign portfolio investors (FPI) seeking to exit the market amid global market
uncertainty.

The Central Bank of Nigeria (CBN) made efforts to stabilize the market by selling $124 million
between N1,595/$1 and N1,611/$1.

During the day’s trading, the naira traded between N1,590/$1 to as high as N1,655/$1 before settling at N1,612.24/$1.

A significant drop of 2.89% in a single-day trading session marks the biggest drop since the
beginning of the year.

This significantly shows growing instability in the currency market, driven
by continuous demand for foreign exchange.

The Nigerian currency did not fare well in the parallel market, with the naira declining by 0.64%
to N1,565/$1, from Friday’s close of N1,555/$1.

Trading against the British Pound, it fell by 0.50% to N2,000/£1, from a prior of N1,985/£1. Same with the euro where it dropped by 0.61% to N1,655/€1, down from N1,645/€1 on Friday.

The increase in foreign portfolio investors’ withdrawal from the market is driven by Trump’s
export tariffs slammed on many countries, consequently affecting the naira.

Market participants
anticipate the CBN’s continuous intervention in other to stabilize the market,

The CBN statement today December 8, 2023, drew attention to the circulation of fake naira notes by some individuals for transactions in food markets and other commercial centres across major cities in the country.”

Sidi Ali, Hakama (Mrs.), the Bank’s Ag. Director, Corporate Communications, in a statement drew attention to Section 20(4) of the CBN Act (2007) as amended, which states that:

“It shall be an offence punishable by a term of imprisonment of not less than 5 years for any person to falsify, make or counterfeit any bank note or coin issued by the Bank which is legal tender in Nigeria.”

She added:

“The CBN is in constant collaboration with relevant security and financial agencies to confiscate fake Naira banknotes, arrest and prosecute counterfeiters. Members of the public are also encouraged to report anyone suspected of having counterfeit naira notes to the nearest police station, branch of the Central Bank of Nigeria or via contactcbn@cbn.gov.ng.

“Meanwhile, all Deposit Money Banks, Financial Houses and Bureau de Change and the general public are enjoined to be more vigilant and take all necessary precautionary measures to curtail the acceptance and distribution of counterfeit notes.

“Furthermore, the general public is encouraged to embrace alternative modes of payment, e-channels, for day-to-day transactions to mitigate the risk of spreading counterfeit banknotes.”