The currency fell to N770 per dollar on the parallel market a day after the Central Bank of Nigeria (CBN) said it will redesign and issue new naira notes to the public as from December 15.
The move by the CBN to phase out the current N200, N500 and N1000 naira notes by January 31, 2023, is in a bid to fight counterfeiting and hoarding.
At the I&E FX market, the Naira also depreciated by 0.64 percent as the dollar was quoted at N444.50 as against the last close of N441.67.
Traders said most participants maintained bids between N425.00 and N450.06 per dollar.
In a note to clients, the Financial Derivative Company Limited said the announcement of the change in naira notes would lead to flight to safety by investors.
“The first reaction to the new regulations is likely to be a flight to safety by investors, for example, anytime there is a major global market shakeout, investors scramble for gold and dump the U.S. dollar.
“So we expect some initial speculation against the Naira but this should be short-lived.
“The Naira traded at N770/$ today (Thursday) but should settle at its true market value in the days ahead. In times of uncertainty, investors, speculators and manufacturers will prefer to be long in dollars and short in domestic currencies,” FDC said in its economic update on yesterday.