The Central Bank of Nigeria (CBN) has ordered Deposit Money Banks (DMBs) and Bureau De Change (BDC) operators to, henceforth, accept from their customers, old and lower denomination of US dollars as legal tender or face sanctions.

This follows numerous complaints from members of the public on the rejection of old/lower denominations of the dollar by these banks and other authorised forex dealers.

The CBN directive is contained in a circular signed by its Director for Currency Operations Department, Mr Ahmed Umar.

Umar, in his statement, said that the apex bank had been faced with complaints of the rejection of old/lower denomination US dollar deposits in the banks, adding that the CBN would sanction any of the banks or forex dealers, who failed to accept such denominations from their customers.

What the CBN’s Director of Currency Operations is saying

Ahmed said, “The CBN has, in recent times, been inundated with complaints from members of the public on the rejection of old/lower denominations of the US dollar bills by DMBs and other authorised forex dealers. All DMBs and authorised forex dealers should, henceforth, accept both old series and lower denominations of USD that are legal tender for deposit by their customers.

“The CBN will not hesitate to sanction any DMB or other authorised forex dealers who refused to accept old series or lower denominations of the USD bills from their customers,” he warned.

He also cautioned forex dealers to desist from the habit of defacing or stamping dollar banknotes as such notes always failed authentication tests during sorting.

Tuesday, 20th April 2021: The exchange rate between the naira and the US dollar closed at N410.67/$1 at the investors and exporters window, where forex is traded officially.

Naira depreciated against the US dollar to close at N410.67 to a dollar on Tuesday, 20th April 2021. This represents a 0.08% decline when compared to N410.33/$1 recorded on Monday, 19th April 2021.

Naira also declined against the US dollar in the parallel market on Tuesday, as it closed at N486/$1, representing 0.83% depreciation compared to N482/$1 recorded on Monday, 19th April 2021.

Nigeria’s foreign reserve dipped for the first in about 19 days, as it declined by 0.1% to stand at $35.22 billion.

Trading at the official NAFEX window

The naira depreciated against the US Dollar at the Investors and Exporters window on Tuesday to close at N410.67/$1. This represents a 34 kobo decline when compared to N410.33/$1 recorded on Monday, 19th April 2021.

• The opening indicative rate closed at N409.5 to a dollar on Tuesday. This represents a 50 kobo depreciation, compared to N409/$1 recorded the previous day.
• Also, an exchange rate of N437.41 to a dollar was the highest rate recorded during intra-day trading before it closed at N410.67/$1. It also sold for as low as N381/$1 during intra-day trading.
• Forex turnover at the Investor and Exporters (I&E) window improved by 42.7% on Tuesday, 20th April 2021.
• A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover increased from $69.71 million recorded on Monday, April 19th, 2021, to $99.49 million on Tuesday.

Cryptocurrency watch

The world’s most sought-after digital asset, Bitcoin grew by 1.56% to trade at $56,562.53 on Tuesday, 20th April 2021.

• Bitcoin increased by $867.98, while Ethereum also grew by 7.96% to trade at $2,336.1.
• The cryptocurrency had fallen to $52,000 on Sunday, sharply off its record high last week of above $64,800 due to a large sell-off tied to rumours of a regulatory crackdown in the US.
• It is worth noting that Bitcoin has risen by 680% in the past 12 months.

Crude oil price slumps

Crude oil prices slumped on Tuesday, 20th April 2021 as Brent Crude dipped by 0.72% to close at $66.57.

• The decrease could be attributed to the growing cases of the covid-19 disease in most European countries.
• According to reports, Funds have cut their positions across the six major oil contracts for two out of the last three weeks, given the pandemic situation and the persistent uncertainty around jet fuel demand recovery.
• Oil prices had posted modest gains in the early hours of Tuesday following reports of an outage in Libya. However, demand concerns sent prices falling to close at $66.57.
• Brent Crude closed at $66.57 (-0.72%), WTI Crude closed at $62.44 indicating 1.48% decline, Bonny Light, $65.17 (-0.12%), OPEC Basket (-0.17%) to close at $65.1 while natural gas also dipped by 0.29% to close at $2.719.

External reserve

Nigeria’s external reserve decreased by 0.1% on Monday, 19th April 2021 to stand at $35.22 billion.

• Nigeria’s foreign exchange reserve dipped for the first time in 19 days, after enjoying positive growth since the 18th of March, 2021.
• The recent increase had been attributed to the increase in the price of crude oil after enduring a significant price crash in 2020.
•  The CBN policy on diaspora remittances might have contributed to the recent positive movement in Nigeria’s external reserve.
• Meanwhile, the Central Bank of Nigeria has ordered Deposit Money Banks (DMBs) and Bureau De Change operatives to accept old and lower denominations of dollars from their customers as legal tender or face sanctions.