Starting December 15, Nigerians might be utilizing newly-designed 100, 200, 500 and 1,000-naira banknotes, the governor of the Central Bank of Nigeria (CBN) has stated. The announcement has since resulted in the naira’s parallel market change rate versus the U.S. greenback dropping to a brand new low of N781:$1.
Redesigning Currency a Global Best Practice
The Central Bank of Nigeria (CBN) governor, Godwin Emefiele, lately stated his establishment will start circulating newly-designed naira banknotes on December 15. Emefiele claimed the injection of the brand new notes into Nigeria’s monetary system is meant to assist the CBN deal with fraud, inflation, and the insecurity problem.
According to Emefiele, who made the announcement at a latest press convention, the affected banknotes are 100, 200, 500 and 1,000-naira banknotes. In justifying the choice to redesign the banknotes, the CBN governor stated doing so is a world finest follow which should be carried out each 5 to eight years. Emefiele stated Nigeria has not redesigned its banknotes for the previous 20 years.
Furthermore, the governor additionally pointed to particular sections of the CBN Act which give the central financial institution the authority to reissue forex. He said:
On the premise of those traits, issues, and details, and in line with Sections 19, Subsections [a] and [b] of the CBN Act 2007, the administration of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and flow into new sequence of banknotes at N100, N200, N500, and N1,000 ranges.
Some Nigerian specialists have instructed that the central financial institution could also be utilizing the forex redesign to legitimize its crackdown on money hoarders and overseas forex sellers. Already, the Nigerian anti-graft physique, the Economic and Financial Crimes Commission (EFCC), has stated it is going to be monitoring the method of swapping outdated banknotes with new ones.
Naira Plunges to New Low Versus the Dollar
In a warning to Nigerian residents who might want to undermine this course of, the chairperson of the EFCC, Abdulrasheed Bawa, warned his group would “spare no effort to bring to book, any financial services operator who runs afoul of extant laws and regulations.”
Besides getting used to gas exercise in the overseas change black market, the naira banknotes — 80% of that are circulating outdoors the banking system — are reportedly the popular fee technique for criminals and kidnappers.
Meanwhile, just below 24 hours after Emefiele’s announcement, the naira’s change rate versus the U.S. greenback on the parallel market fell from N760:$1 to as little as N781:$1, a brand new all-time low. According to a report in the Premium Times, the naira’s newest fall will be attributed to the exercise of huge money holders who’re offloading the soon-to-be-demonetized naira banknotes.
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