The Governor of the Central Bank of Nigeria (CBN) announced that starting December 15, Nigerians will be using newly designed 100, 200, 500 and 1,000 Naira bills. Following this announcement, the naira’s exchange rate against the U.S. dollar at the parallel market hit a record low of $781: $1
Currency redesign is a global best practice
Central Bank of Nigeria (CBN) Governor Godwin Emefiele recently stated that the bank will begin circulating the newly designed naira bills on December 15. Governor Emefiele claimed that the introduction of the new bills into the Nigerian financial system is intended to help the CBN tackle the problems of fraud, inflation, and security.
According to Emefiele, who made the announcement at a recent press conference, the bills affected are the 100, 200, 500, and 1,000 Nira bills.The CBN governor justified the decision to redesign the bills by saying that this is a global According to Emefiele, Nigeria has not changed the design of its banknotes for the past 20 years.
The governor further pointed to a specific section of the CBN Act that empowers the central bank to re-issue currency. He said,:
Based on these trends, issues and facts, and in line with section 19, subsections [a] and [b] of the CBN Act 2007, the management of the CBN, Muhammadu Buhari to redesign, manufacture and circulate a new series of bank notes at N100, N200, N500 and N1000 levels The approval of the President was sought and obtained.
Some Nigerian experts have suggested that the central bank may be using the redesign of the currency to justify its crackdown on cash hoarders and foreign currency dealers. Already Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC), has said it will monitor the exchange process between the old and new bills.
Naira Plunges to New Low Against Dollar
EFCC Chairman Abdulrasheed Bawa warned Nigerians who try to stymie the process that the organization will “spare no effort to arrest financial service operators who violate existing laws and regulations. will spare no effort to arrest those financial service providers who violate existing laws and regulations,” he warned.
Naira bills are not only used for foreign exchange black market activities, but 80% of them circulate outside the banking system and are reportedly the preferred payment method of criminals and kidnappers.
Meanwhile, less than 24 hours after the Emefiele announcement, the exchange rate of the naira against the US dollar at the parallel market fell from 760:1 to 781:1, hitting an all-time low. Premium Times reports that the latest drop in the naira is attributed to the activity of large cash holders who are unloading the soon to be defunct naira bills.
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