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Naira To Have A New Look

By Glam & Essence

The Central Bank Governor, Godwin Emefiele,has announced  the redesigning of the country’s currency, the naira.

According to Emefiele, at a press briefing in Abuja, on Thursday, the exercise would affect the highest denominations: 200, 500, 1000 notes, while noting that the action was taken in order to take control of the currency in circulation.

Emefiele said the bulk of the country’s currency notes were outside bank vaults and that the CBN wouldn’t continue to allow that situation.

 Emefiele said that the new notes will be released for public use on December 15, 2022,while the old notes and the new notes would circulate together until January 31, 2023, when the old notes would cease to be legal tender.

Emefiele stated that there has been concerns with the management of current series of banknotes, and currency in circulation, particularly those outside the banking system in the country.

He stated that, “As you all may be aware, currency management is a key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) of the CBN Act 2007. Indeed, the integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.

“In recent times, however, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.”

He noted that hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation was outside the vaults of commercial banks and that  remains a major challenge for the apex bank.

This has led to the continued shortage of clean and fit banknotes,leading to the negative perception of the CBN and increased risk to financial stability,as well as increasing the ease and risk of counterfeiting evidenced by several security reports.

 These were the reasons he gave for redesigning the notes.

He also pointed out that recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier, as in recent years, the CBN has recorded significantly higher rates of counterfeiting, especially at the higher denominations of N500 and N1,000 banknotes.

While  noting that although global best practice was for central banks to redesign, produce and circulate new local legal tender every 5–8 years, the Naira has however not been redesigned in the last 20 years.

 “On the basis of these trends, problems, and facts, and in line with Sections 19, Subsections a and b of the CBN Act 2007, the Management of the CBN 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.

“In line with this approval, we have finalized arrangements for the new currency to begin circulation from December 15, 2022. The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender.

“Accordingly, all Deposit Money Banks currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately. The newly designed currency will be released to the banks in the order of First-come-First-serve basis.

“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them withdraw the new banknotes once circulation begins in mid-December 2022. All banks are therefore expected to keep open, their currency processing centers from Monday to Saturday so as to accommodate all cash that will be returned by their customers.

“For the purpose of this transition from existing to new notes, bank charges for cash deposits are hereby suspended with immediate effect. Therefore, DMBs are to note that no bank customer shall bear any charges for cash returned/paid into their accounts.

“Members of the public are to please note that the present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services.”explained Emefiele

The governor added said that  the action would also raised its stake in addressing the challenge of inflation.

Emefiele assured that the CBN would continue to monitor both the financial system in particular, and the economy in general, and always act in good faith for the achievement of the Bank’s objectives and the betterment of the country.

Glam & Essence Magazine