It is no longer news that the Central Bank of Nigeria (CBN) had launched new N200, N500, and N1,000 denominations, setting Friday, February 10, 2023, as the deadline to phase out the old notes.
BizWatch Nigeria recalls that on Wednesday, October 26, 2022, CBN floated the policy, as it also disclosed a new cash withdrawal limit. Although, the deadline to phase out the old naira notes was announced yesterday (Sunday, January 29).
Announcing the deadline extension after a meeting with the President in Daura, Katsina State, the CBN Governor, Godwin Emefiele said the extension of the deadline was to allow for the collection of more old notes legitimately held by Nigerians and achieve more success in cash swap in our rural communities.
Emefiele added that after the deadline, people’s failure to deposit all old notes into the banking system would be their losses. However, while some stakeholders have applauded the apex bank for the move, other members of the public have continued to groan.
How the floating of the new naira notes is affecting you
While financial analysts are of the opinion that the development would bring more traditionally unbanked people into the banking system, this writer understands that it is not expected to trigger economic dislocation, especially considering the short time frame.
As rural dwellers who live far from where banking services are available, are experiencing hardship dumping the old notes, as well as, initially, obtaining the new ones, people are now generally experiencing a rush to dispose of old notes, as well as withdrawal, runs at automated teller machines (ATMs) immediately after the new notes come into circulation.
Meanwhile, the central bank attributed this development to the amount of money in circulation.
“As of October 2022, currency in circulation had risen to N3.23 trillion; out of which only N500 billion was within the banking Industry and N2.7 trillion held permanently in people’s homes,” Emefiele was quoted as saying.
Upshot
This writer believes that as far as liquidity management is concerned, this policy would check counterfeiting of money, money laundering, terrorism, and as well moderate lots of currency in circulation.
