Experts Say New Naira Banknotes Good For Economy

Experts Say New Naira Banknotes Good For Economy


- Advertisment -spot_img
Everything on JUMIA

As the Central Bank of Nigeria (CBN) introduces new naira banknotes, some financial experts have commended the effort put into the redesign and said it would positively affect the economy.

Experts Say New Naira Banknotes Good For Economy
Naira banknotes | HowNG

The experts, according to News Agency of Nigeria, spoke in separate interviews on Thursday.

They spoke against the backdrop of an announcement by the CBN that new designs of the N200, N500 and N1,000 denominations would be produced and circulated on December 15.

Flash Sales

According to Umhe Uwaleke, a financial economist and professor of capital market at the Nasarawa State University, Keffi, the decision will be positive for the economy in the medium to long term.

Mr Uwaleke said the measure would go a long way to ensure that the naira notes in circulation outside the banking system were brought into the banking system.

He said the measure would also provide enough liquidity for banks and more money for the banks to lend.

“The measure does not amount to demonetisation of big currency notes often carried out by central banks to curb black money and corruption. But it will go a long way in ensuring that a lot of naira notes circulating outside the banks are crowded in,” the professor explained. “If it leads to large deposits in banks, it means the banks will have more money to lend, which may reduce interest rates.”

Read Also: Fire Incident: All Important Documents Are Intact – WAEC

He added, “Perhaps more importantly, with increased currency in circulation now in the vault of banks, I expect to see improvement in monetary policy transmission.”

Mr Uwaleke further noted that it might also reduce speculative attacks on the naira in the parallel market in the medium term.

“I expect that the Financial Intelligence Unit will be on the lookout for huge deposits as a way of monitoring illegitimate transactions. Despite the huge cost involved in changing currency notes, I think it’s time to sanitise the system, especially now that electioneering activities have kicked off,” he explained.

The financial expert, however, said the January 31, 2023 deadline was too short, considering the number of naira denominations involved, urging the CBN to consider extending it.

An economist, Tope Fasua, said the measure would significantly affect the economy, adding that it is essentially about “black money.”

He suggested that the CBN should take such measures more frequently.

“When central banks do this, they try to pull in monies people are hiding; illegal money, corruption money, kidnapping money. Nigeria has managed to become a hub for these kinds of illegalities,” stated Mr Fasua. “I will even suggest that the CBN does this more often, maybe every 10 years. You will see a scenario where the banks are awash with liquidity.”

Read Also: U.S. Trains Nigerian Youths On Nation’s Economy

According to him, many people are sitting on billions of naira and “even in dollars.”

“The CBN should also see how it can pull in the dollars,” he added.

Mr Fasua advised that the idea of individuals operating personal domiciliary bank accounts should be banned, adding that nobody needed it.

“People are speculating against their own currency in their own country. That is not allowed in any economy. They should pull in illegal, black naira and then see how they can pull in illegal dollars. The CBN can control these things through the Deposit Money Banks,” stated the economist.

However, Okechukwu Unegbu, a financial expert and past president of the Chartered Institute of Bankers of Nigeria (CIBN), said redesigning the naira was not the most important problem facing the economy.

Mr Unegbu preferred that the CBN should have ensured that the scarce denominations, like N100 and N200 are readily available by printing more. (NAN)

New Webbs is an independent online news platform launched with the aim of connecting the world with the latest news on the web.


Please enter your comment!
Please enter your name here

Latest news

NBS Report: Nigeria’s Debt Hits N46.25trn In Q4 2022

Abuja, Nigeria - Domestic and external debt stocks of the federal republic of Nigeria, 36 state governments and the...

It’s The Worst Time To Fight Me – A Joshua

Ahead of the fight with Jermaine Franklin, Anthony Joshua (AJ) - a former world heavyweight champion, said Wednesday, that...

India Upholds $160m Fine On Google

In a case related to Android's market dominance, an Indian appeals court has upheld a $160m fine imposed on...

Four Dead, 5 Injured In A Lone Accident

Bauchi, Nigeria - A solo accident in Bauchi State has claimed the lives of four people while leaving five...
- Advertisement -spot_imgspot_img

As Nigerian Idol Season 8 Goes Live, Bigi Promises Bounty Excitement

Lagos, Nigeria -  Bigi, the Naija favourite soft drink, has for the third time, sponsored Nigerian Idol Season 8...

Whitney Adeniran: Court Grants Chrisland Staff Bail

Lagos, Nigeria -  A Lagos High Court on Thursday has admitted four Chrisland School Ikeja staff members to bail...

Must read

37 African Countries Face Health Worker Shortage – WHO

Out of fifty-five (55) countries facing serious health worker...

IWD 2023: KloverHarris Harps On Innovative Technology In Promoting Gender Equality

Lagos, Nigeria - KloverHarris Limited, in celebration of International...
- Advertisement -spot_imgspot_img

You might also likeRELATED
Recommended to you

Buy More, Save More