Nigeria's Central Bank Extends Deadline to Turn in Naira Notes

The Central Bank of Nigeria decided, on Sunday, to extend the deadline for expiry of currency denominations of the Nigerian currency "Naira" until February 10, after citizens lined up in front of banks and commercial activities almost stopped due to the lack of the new currency.

According to Bloomberg News, Central Bank Governor Godwin Emefele said today in a statement that the extension will give “all Nigerians who have the currencies slated for deletion” the opportunity to return them to the bank.

Since mid-December, Nigeria has started issuing 200, 500 and 1,000 notes with a different design to absorb excess cash outside the banking system.

The central bank said that the currency exchange process has so far collected 1.9 trillion naira ($4.1 billion) in the banks' coffers.

The move caused the Nigerian local currency to fall further against the US dollar in the illegal market widely used in the country, as Nigerians rushed to buy the greenback after the Central Bank announced that it would redesign the highly valued notes.

Demand for foreign currency has soared in Africa's largest economy since the central bank announced its plan to replace the 200, 500 and 1,000 naira notes.

The African country operates a multi-rate exchange system, dominated by an official spot rate that is closely monitored by the Central Bank, while the currency circulates on the unlicensed black market in a free manner.

Nigerian Finance Minister Zainab Ahmed warned that redesigning the currency might weaken the exchange rate of the naira as the population rushed to replace old currencies, but Nigerian President Muhammadu Buhari supported the central bank, stressing that this measure would be a punishment for currency hoarders, and fight inflation, which reached its highest levels in 17 years, last September.