Economy and Business

Naira scarcity bites harder as Nigeria’s financial markets shut down for Christmas

The ongoing cash scarcity in Nigeria is already biting harder for residents as today and tomorrow, December 25th and 26th, 2023, the financial market in Nigeria, encompassing various entities like commercial banks and financial institutions nationwide, will remain closed.

This observance aligns with the public holidays of Christmas and Boxing Day as directed by the federal government.

The closure of the institutions has spurred concerns among stakeholders about the potential worsening of cash-related challenges for Nigerians. Banking advisories have urged customers anticipating transactions during this period to resort to electronic banking services.

Prominent banks like UBA and Wema Bank have communicated to their customers about the closure and encouraged the utilization of their digital channels for banking needs during this period.

However, reports indicate widespread frustration due to Automated Teller Machines (ATMs) running out of cash nationwide.

This shortage impacts daily transactions and raises questions about the reliability of the financial infrastructure, particularly concerning the ease of access to physical cash.

The scarcity significantly affects segments of the population reliant on cash transactions, including small businesses, street vendors, and those without access to digital payment systems.

The rise in charges for cash withdrawals through Point of Sale (POS) transactions further burdens Nigerians grappling with soaring costs.

The challenges contribute to the depreciation of the naira and worsen exchange rate issues due to the reduced availability of cash within banks and the financial system.

Industry analysts warn that this situation could lead to increased cash hoarding by banks, businesses, and individuals, affecting liquidity and further impacting the purchasing power of citizens.

Adamu Rabiu, an analyst based in Kaduna, highlighted the potential ripple effects, telling Nigerian Tribune: “This, in turn, is already affecting the purchasing power of the common man and adding to the negative complexities of an already challenging economic landscape.

“Cash hoarding by banks, businesses and individuals will rise as people are unable to withdraw cash. They hold onto their funds and deprive the banking system of the much-needed liquidity.“

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