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Naira Tumbles as CBN Places Limits on Cash Withdrawals

The value of the Naira to the Dollar went down on Tuesday at the Peer-to-Peer (P2P), the parallel market, and the Investors and Exporters (I&E) windows of the foreign exchange (FX) after the Central Bank of Nigeria (CBN) introduced new cash withdrawal limits via over-the-counter (OTC) and other channels.

At the OTC channel, the central bank stated that it would be N100,000 for individuals, with a 5 per cent processing fee for amounts above the cap, while 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.

This new policy affected the value of the Naira in the P2P FX window as it was 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.

Equally, the local currency 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.

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.

Meanwhile, in the cryptocurrency market, it was not good for Bitcoin (BTC) as it went below the $17,000 mark to sell at $16,999.47 after it shed 0.18 per cent.

Litecoin (LTC) lost 2.0 per cent to trade at $78.85, Dogecoin (DOGE) went down by 1.9 per cent to $0.0992, Cardano (ADA) depreciated by 0.9 per cent to $0.3896, and Ethereum (ETH) declined by 0.3 per cent to sell at $1,256.38.

However, Solana (SOL) recorded a 2.4 per cent jump to trade at $14.14, Binance Coin (BNB) added 0.3 per cent to close at $289.05, Ripple (XRP) gained 0.02 per cent to quote at $0.3896, while US Dollar Tether (USDT) and Binance USD (BUSD) closed flat at $1.00 each.

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