The naira (sign: ₦; code: NGN) is the currency of Nigeria. The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Federal Republic of Nigeria. It controls the volume of money supplied in the economy in order to ensure monetary and price stability.
Banknotes of Nigeria
Introduction of the Naira
The naira was introduced on 1 January 1973, replacing the Nigerian pound at a rate of £1 = ₦2. The coins of the new currency were the first coins issued by an independent Nigeria, as all circulating coins of the Nigerian pound were all struck by the colonial government of the Federation of Nigeria in 1959, with the name of Queen Elizabeth II on the obverse. This also made Nigeria the last country in the world to abandon the £sd currency system in favour of a decimal currency system.
Early Coins and Banknotes
In 1973, coins were introduced in denominations of 1⁄2, 1, 5, 10 and 25 kobo, with the 1⁄2 and 1 kobo in bronze and the higher denominations in cupro-nickel. The 1⁄2 kobo coins were minted only that year. On 1 January 1973, the Central Bank of Nigeria introduced notes for 50 kobo, ₦1, ₦5, ₦10 and ₦20: in April 1984, the colors of all naira banknotes were changed in an attempt to control money laundering. In 1991, smaller 1, 10 and 25 kobo coins were issued in copper-plated-steel, along with nickel-plated-steel 50 kobo and ₦1. In 1991, ₦50 notes were issued, while the 50 kobo and ₦1 notes were replaced by coins in 1991.
Further Developments in Nigerian Currency
On 28 February 2007, new coins were issued in denominations of 50 kobo, ₦1 and ₦2, with the ₦1 and ₦2 bimetallic. On 28 February 2007, new versions of the ₦5 to ₦50 banknotes were introduced. Originally the ₦10, ₦20 and ₦50 were to be polymer banknotes, but the ₦5, ₦10 and ₦50 were delayed to late 2009 and only the ₦20 was released in polymer. The notes are slightly smaller (130 × 72 mm) and redesigned from the preceding issues. On the ₦1,000 notes, there is a subtle shiny strip running down the back of the note to prevent counterfeiting.
Read also: Current USD/NGN Value
Redenomination Plans and Inflation Control
There was a government plan to redenominate the naira at 100:1 in 2008, but the plan was suspended. The Central Bank of Nigeria claimed that they attempted to control the annual inflation rate below 10%. In 2011, the CBN increased key interest rate six times, rising from 6.25% to 12%.
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Currency Redesign of 2022-2023
In 2022, a policy was implemented by the Central Bank of Nigeria (CBN) to redesign and replace the highest denomination banknotes: the ₦200, ₦500, and ₦1,000 notes. The Central Bank of Nigeria cited several reasons for the currency redesign and the associated demonetization policy, noting that, by global best practice, currency should be redesigned every 5 to 8 years, and the Naira was long overdue. The redesign primarily focused on changing the colour palette and enhancing the security features of the affected denominations.
New Naira Notes
Unlike some previous currency changes, the core images (portraits of national figures and other symbols) on the front and back of the notes remained largely the same, though the aesthetic details were modernised.
Impact of the 2023 Currency Crisis
The 2023 Nigerian currency crisis was precipitated in January 2023 by a shortage of naira cash amid an attempt by the Nigerian government to force citizens to use newly-designed notes, which the government said would help stem the tide of vote-buying in the lead-up to the 2023 general elections. The scarcity of both old and new notes led to a prolonged cash crunch across Nigeria, severely impacting the economy. Businesses, particularly those in the informal sector which relies heavily on cash, suffered significant losses.
Read also: Exchange Rate Analysis
Naira Exchange Rate Dynamics
The Nigerian Central Bank stated that it would make the naira fully convertible against foreign currencies by 2009. Currently, the amount of foreign currency is regulated through weekly auctions, while the Central Bank sets the exchange rate. The naira appreciated against the dollar through 2007 due to high oil revenues.
As of current data, the exchange rate between the Euro and Nigerian Naira is dynamic. For example, as of 02:00AM UTC, €100.00 is worth ₦165,934.59. This rate fluctuates based on market conditions.
Factors Influencing Exchange Rates
Currency exchange rates fluctuate mainly due to a combination of factors, including global economic activity, market sentiment, interest rate changes, inflation, trade imbalances, and central bank monetary policies. For example, when a country has a strong economy and rising interest rates, it may attract more foreign capital, pushing up the value of its currency. Conversely, political instability or economic slowdown may lead to currency depreciation.
Historical Exchange Rate Trends
Analyzing historical exchange rates provides insights into the volatility and trends of the EUR to NGN exchange rate.
Here's a summary of EUR to NGN exchange-rate statistics:
Read also: Exchange Rate: 300 USD to NGN
| Statistic | Last 7 Days | Last 30 Days | Last 90 Days |
|---|---|---|---|
| High | 1,686.2 | 1,722.1 | 1,800.6 |
| Low | 1,652.6 | 1,652.6 | 1,652.6 |
| Average | 1,665.0 | 1,694.5 | 1,745.6 |
| Volatility | 0.79% | 0.48% | 0.40% |
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