Nigerian Central Bank Says It Will Release New Banknotes in December — Naira Falls to New Low – Featured Bitcoin News

The governor of the Central Bank of Nigeria, CBN, stated that Nigerians would be using new 100, 200 and 500-naira banknotes starting December 15. The announcement has since resulted in the naira’s parallel market exchange rate versus the U.S. dollar dropping to a new low of N781:$1.

A Global Best Practice: Redesigning currency

Godwin Emefiele (the governor of the Central Bank of Nigeria) recently announced that his bank will start circulating new naira banknotes in December. Emefiele claimed the injection of the new notes into Nigeria’s financial system is intended to help the CBN tackle fraud, inflation, and the insecurity challenge.

Emefiele made the announcement during a recent press conference. He said that the banknotes in question are 100, 200 500, 500, and 1,000-naira banknotes. The CBN Governor stated that redesigning banknotes is an international best practice and should be done every five to eight year. Emefiele stated that Nigeria had not changed its banknotes in the last 20 years.

Additionally, the governor cited specific provisions of the CBN Act giving the central bank authority to reissue currencies. He stated:

Based on these trends and problems and the facts and Sections 19, Subsections [a] [b]CBN Act 2007: The CBN management sought President Muhammadu Buhari’s approval to design, produce and circulate new banknotes, at N100,N200,N500 and N1,000.

Experts in Nigeria suggest that the central banks may use the currency design to justify its clampdown on foreign currency dealers and cash hoarders. The Economic and Financial Crimes Commission of Nigeria (EFCC) has already stated that it will monitor the swapping of old banknotes for newer ones.

Naira Drops to a New Low Against the Dollar

In a warning to Nigerian residents who may want to undermine this process, the chairperson of the EFCC, Abdulrasheed Bawa, warned his organization would “spare no effort to bring to book, any financial services operator who runs afoul of extant laws and regulations.”

Besides being used to fuel activity in the foreign exchange black market, the naira banknotes — 80% of which are circulating outside the banking system — are reportedly the preferred payment method for criminals and kidnappers.

Meanwhile, just under 24 hours after Emefiele’s announcement, the naira’s exchange rate versus the U.S. dollar on the parallel market fell from N760:$1 to as low as N781:$1, a new all-time low. According to a report in the Premium Times, the naira’s latest fall can be attributed to the activity of large cash holders who are offloading the soon-to-be-demonetized naira banknotes.

To receive a weekly update about African news, sign up here

Let us know your opinions on the story. Please comment below to let us know your thoughts.

Terence Zimwara

Terence Zimwara was a Zimbabwean award-winning journalist and author. His writings have covered the economic problems of several African countries and how digital currency can offer an escape route.