Business
CBN sensitises traders on economic benefits of redesigned currency notes
The Central Bank of Nigeria (CBN) on Wednesday in Akure sensitised traders in the popular Oja Oba and Adedeji Markets to the economic benefits of the newly- redesigned Naira notes.
The bank said that currency management in Nigeria had faced several challenges that had continued to grow in scale and sophistication with unintended consequences for the integrity of both the CBN and the country.
Speaking at the sensitization, the Akure Acting Branch Controller of CBN, Mr Samuel Giwa, said there was significant hoarding of banknotes by some members of the public.
Giwa stated that statistics showed N2.72 trillion out of the N3.26 trillion currency in circulation as of June 2022 was outside the vaults of commercial banks across the country, and supposedly held by members of the public.
According to him, the statistics shows that 84.71 per cent of currency in circulation are outside the vaults of commercial banks, with only 15.29 per cent in the CBN’s vaults.
He added that there was worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability.
The CBN Controller said that there was increasing ease by criminals and risk of counterfeiting — evidenced by several security reports received at the CBN.
He explained that the new currency policy would help to control inflation as the exercise would bring the hoarded currency notes into the banking system, thereby making monetary policy more effective.
“It will also help with better design and implementation of Monetary Policy as we would have much more accurate data on money supply and monetary aggregates;
“We believe that this exercise would help in increasing financial inclusion, moving towards a more cashless economy, and ensuring greater formalisation of the Nigerian economy;
“The currency redesign would also assist in the fight against corruption as the exercise would rein in the higher denomination used for corruption, and the movement of such funds from the banking system could be tracked easily,” he said.
Giwa said the global best practice was for central banks to redesign, produce and circulate new local legal tender every five to eight years, but the naira had not been redesigned in almost 19 years.
“On the basis of these trends, problems, facts and benefits of currency redesign, and in line with the CBN Act 2007, the management sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N200, N500 and N1,000 levels.”
Giwa stated that the redesigned notes enhanced security, greater durability, attractiveness and embedded with Nigerian rich heritages.
The acting CBN Controller said that the current banknotes of N200, N500 and N100 would cease to be legal tender after Jan. 31.
“The new design and current series are to circulate side by side until Jan. 31, 2023 when the current series cease to be legal tender.
“We advise members of the public to ensure that they deposit cash holdings in these denominations at their commercial banks.
” There is no limit to how much a customer can deposit between now and Jan. 31, 2023 as the CBN has suspended bank charges.
“Accept it, use and respect it as our national symbol. We encourage the public to explore other payment channels, such as e-naira, POS, electronic transfer, USSD, internet banking, and mobile money operators and agents, for their economic activities,” Giwa stated.
Mrs Emily Adesida, an official of Adedeji Market, appreciated the CBN for the sensitization, saying it was a good step toward a new economy.
Adesida said that the redesign would play major role in addressing inflation in the country.
She urged the CBN to make the new notes available for use, saying that many banks and POS attendants were still disbursing the old currency notes.