The Central Bank of Nigeria (CBN on Tuesday insisted that the January 31 deadline for the withdrawal of old Naira notes from circulation is sacrosanct just as it has raised interest rate to 17.5 percent.
The CBN Governor, Godwin Emefiele announced this after the apex bank’s Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
He said the time given for the swap of the old naira notes with new ones were enough for Nigerians to go to commercial banks and get new notes
He also said kidnapping and ransom-taking have reduced since the three banknotes were redesigned.
The CBN governor said, “I must say here that unfortunately, I don’t have good news for those who feel that we should shift the deadline. My apologies. The reason is because, just like the President has said on more than two occasions and even to people privately, for us, 90 days, in fact, we feel it is 100 days, that it is enough for anyone who has money or the old currency to deposit it in the bank. And we took every measure to ensure all the banks remain open to receive all old currencies.
“100 days we believe is more than adequate. We called on the banks, not only are we requesting you to extend your banking hours so that you can receive old currencies, but we are also asking you to keep your doors open on Saturdays, ladies and gentlemen, the banks did not even have any reasons to even keep their banking halls open on Saturdays neither did they see the kind of rush that they anticipated.
The apex bank on Tuesday raised its benchmark lending rate by 100 basis points (bps) to 17.5%, as monetary authorities seek to rein in inflation without choking off lending to the private sector.
The central bank’s decision came after inflation dipped for the first time in 11 months in December to 21.34%, compared with 21.47% in November.
The central bank’s decision came after inflation dipped for the first time in 11 months in December to 21.34%, compared with 21.47% in November.
But Central Bank of Nigeria Governor Godwin Emefiele said members of the monetary policy committee did not think the decline was big enough to justify either holding, or cutting the rate.
“For us it is not time to celebrate yet. The issue was to what extent should we tighten,” Emefiele told a news conference.
Some analysts had expected the central bank to hold rates steady, after it raised them by 500 basis points last year to combat inflation, which is at its highest in nearly two decades.
“Our immediate read on this is that the CBN is showing more anti-inflation resolve, and preparing the way – perhaps – for an eventual FX policy liberalisation that will require a reset to higher market rates,” said Razia Khan, Standard Chartered managing director and chief economist, Africa and Middle East.
Buhari’s administration has sought to keep the naira currency strong as a matter of national pride, but that became unsustainable during an oil price crash in 2016. To avoid a devaluation, parallel exchange rates were introduced, but many economists have been calling for the complex system to be ditched.
The central bank has set a Jan. 31 deadline to withdraw high value naira bank notes, part of measures to tighten money supply and rein in inflation.
Around 1.3 trillion naira ($2.9 billion) had been deposited into the central bank by last week ahead of the deadline when the old currency notes cease to be legal tender, said Emefiele.
Emefiele projected the economy will grow at a subdued rate of 2.88% this year, lower than government’s forecast. He said exchange rate pressure, widespread insecurity, intermittent fuel shortages and high energy prices were key sources of shocks to Africa’s biggest economy.
Meanwhile, the Senate has again asked the Central Bank of Nigeria (CBN) to extend the deadline for the stoppage of the use of old naira notes from January 31 till July 31, 2023.
With one week to the deadline for the termination of the use of the old naira notes, federal lawmakers in the Senate said the policy should be extended as banks are still dispensing old naira notes because of insufficient new naira notes.
The lawmakers also lamented the hardship the policy is causing Nigerians as they said there are long queues at banks across the country because people are trying to deposit their old notes and get new ones.
Some legislators also asked the Senate to concur with the House of Representatives which had earlier called for an extension of the policy and compel the CBN Governor, Godwin Emefiele to extend the deadline.
The calls by the legislators coincided with a statement by the CBN governor who on Tuesday at the end of Monetary Policy Committee (MPC) meeting in Abuja said the apex bank’s January 31, 2023 deadline for the validity of the old N200, N500, and N1,000 notes remains.
