Like an avalanche in suddenness and overwhelming quantity, the announcement by the Central Bank of Nigeria (CBN) last week on redesigning some naira notes
Similarly, the CBN, as part of its contribution towards the celebration of the 50th anniversary of Nigeria’s Independence and 100 years of its existence as a nation, had issued the N50 Commemorative polymer banknote a year later; and the N100 Commemorative banknote in December 2014. With this apparently, the CBN had even tarried for too long considering that it had to wait 20 years to carry out a redesign compared to the standard practice worldwide.
The rush will lead to large deposits in banks; thus, banks will have more money to lend, which may reduce interest rates. It will also reduce speculative attacks on the naira in the parallel market. The Financial Intelligence Unit should be on the watch-out for huge deposits as a way of monitoring illegitimate transactions.
Some concerns have been raised concerning the redesigning of the naira notes that includes the fragility of the economy, the naira against other currencies, inflation and unemployment, timing among others. While these concerns are valid, the initiative by the CBN seeks to even solve some of these problems. A particular issue that has been of particular interest is the timeline for rolling out the new notes. Many say the December 15 deadline which is just weeks away is tight.
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