In an effort to fulfill its ambitious goal of releasing the new N200, N500, and N100 notes, the Central Bank of Nigeria (CBN) has secured the support of President Muhammadu Buhari to release the redesigned high-denomination bank notes today.
The redesigned N200, N500, and N1,000 notes will be issued by the CBN starting on December 15, 2022, and the old and new currencies will continue to be accepted as legal currency and circulate concurrently until January 31, 2023, according to an announcement made on October 26.
President Buhari will unveil the new naira notes today (Wednesday) at the weekly meeting of the Federal Executive Council, according to Central Bank Governor Godwin Emefiele, who spoke to reporters at the conclusion of a two-day Monetary Policy Committee meeting yesterday. This is in contrast to the earlier date for the unveiling.
During the final MPC of the year, Emefiele also made the announcement that the committee had decided to increase the benchmark interest rate by another 100 basis points, to 16.5 percent from 15.5%, in order to slow the rate of inflation surrounding other factors.
The Monetary Policy Rate was raised by the committee with a unanimous vote (MPR). The MPR was increased by 100 basis points by nine members and by 50 basis points by two members.
Buhari will introduce new naira notes on Wednesday.
Emefiele claimed that MPC decided to mildly tighten rates in order to prevent the benefits of the previous tightening from being undone by listening to the market or holding rates steady.
According to him, the MPC chose to keep tightening, albeit at a little slower rate, noting that doing so would reduce the negative real effective interest margin, boost market sentiment, and further regain investor confidence.
Additionally, Mr. Emefiele is adamant that the bank would not extend the January 2023 deadline for accepting the current notes as legal cash. Some people objected because they said that the six-week window would lead to long lines at banks. Others contend that the schedule would be detrimental to the impoverished in rural areas who lack convenient access to bank branches.
“The response is still no, capital No! When asked if the central bank would change the deadline, the CBN governor responded, “We would not shift any deadline. He said that what the bank had done was legal. Emefiele stated that anyone in any area of Nigeria can deposit money because there is nearly a 100-day opportunity for people to return their old currency.
Emefiele responded, “My response is yes,” when asked if the bank had taken the necessary steps to ensure that persons with cash could deposit it in the banks.
When he announced the release of the new notes on October 26, Emefiele stated that all banks will maintain their currency processing centers operational from Monday through Saturday. According to him, CBN has 36 core processing centers across the nation.
According to the CBN governor, there were 1.4 million agency banks operating in nearly all of Nigeria’s local governments as of October 2022.
I honestly don’t see why somebody would claim that he needs a delay because he is unable to deposit his funds in the bank. If you live in a rural location, which is where the agency networks are, it will be like claiming that we have worked on currency points all over the nation, he said.
MPC stated that despite its last three straight significant policy rate increases, inflation has continued to rise, albeit at a slower rate.
