Godwin Emefiere, Governor of the Central Bank of Nigeria, said the newly designed Naira banknote is set to increase the effectiveness of the organization’s monetary policy and strengthen its cause for financial inclusion.
Force currency hoarders to return to the banking system
The recently launched Naira banknotes are expected to force currency dealers to return “hoarded currency”, according to Nigeria’s central bank governor Godwin Emefile. [back] to the banking system. In a speech delivered at the unveiling of the new Naira banknote, Emefiere argued that the new banknote could increase the effectiveness of the country’s monetary policy.
In addition to helping bring older banknotes back into circulation, the CBN governor argued that the redesigned naira notes would likely strengthen the bank’s cause for financial inclusion. did.
We believe this effort will help promote financial inclusion, transition to a more cashless economy and facilitate the formalization of the Nigerian economy.
According to Emefiele, once the work to phase out the older 100, 200, 500 and 1,000 Naira notes is completed, it will be easier for CBN to track and identify suspicious fund movements. At present, this is not possible as “84.71% of naira notes in circulation are outside commercial bank vaults”.
CBN’s Controversial Naira Redesign Plan
Meanwhile, in the same speech, Emefiele reiterated CBN’s earlier allegations implying that the controversial decision to reopen banknotes had been greenlit by Nigerian President Muhammad Buhari.
According to CBN, the current phasing out of banknotes is not only long awaited, but is also a “global best practice for central banks” that should be repeated every five to eight years. However, after CBN announced plans to replace old Naira notes with redesigned banknotes, the currency’s parallel market exchange rate and the US dollar fell sharply.
As reported by Bitcoin.com News, the naira’s plunge was due to a sharp surge in demand for the US dollar against a decline in supply. But after Nigeria’s Economic and Financial Crimes Commission began cracking down on so-called illegal currency dealers, the parallel exchange rate for the local currency went from just over 900 units per dollar in October to $1 by 26 November. Improved to just under 800 units per.
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New naira notes to make monetary policy more effective — Nigeria central bank governor
Source link New naira notes to make monetary policy more effective — Nigeria central bank governor