In what looks like listing the achievements of the currency redesign/swap exercise, Central Bank of Nigeria (CBN) has giving itself a pat on the bank, saying the high liquidity outside the banking system that has been distorting its monetary policy measures has been reduced by 75 percent so far.
Godwin Emefiele, in a statement signed by him on sunday admitted also that the exercise has brought about the inflation trending downwards while the exchange rate us becoming relatively stable.
But some stakeholders have bemoaned the approach of CBN, regarding it as subservient and political.
Particularly, they view the traveling to the President to seek approval before announcing the extention as tantamount to surrendering the independence of the apex bank.
Adewole Adebayo , Social Democratic Party presidential candidate says Emefiele’s action amounted to running from pillar to post, and which does not instil confidence in the bank even when viewed by analysts from within and outside the country.
Adebayo, who appeared on Channels Television’s Sunday politics said he should have rather consulted the board of the bank, adding that CBN must be seen to be responsible to its responsibilities and not be involved in politics.
Similarly, his counterpart with the Young Peoples Party, Malik Ado Ibrahim says the Governor’s action is capable of further eroding confidence which has become the general problem in the country.
The presidential candidate, who also appeared on Channels Television’s Sunday politics believed that there’s need for confidence in the currency and the institution.
But Emefiele, in the statement issued said the decision to redesign the Naira was already paying off with positive economic indicators emerging.
“Our aim is mainly to make our monetary policy desirous, more efficacious and like you can see, we have started to see inflation trending downwards and exchange rates relatively stable. We can see that the military are making good progress in their important task in Nigeria.”
“we are happy that so far the exercise has achieved a success rate of over 75 percent of the N2. 7trillion held outside the banking system.
The implication, our analysis shows is that about N2,025,000,000,000 has been recaptured back into the system through the policy
The governor revealed further that part of the reasons the Federal Government decided on the redesign of currency denominations was the fact that N2.7trillion was lying idle in people’s homes prior to 2015 when the Buhari administration came on board.
He said as at 2015 currency-in-circulation was only N1.4 trillion, while as at October 2022, currency in circulation had risen to N3.23 trillion, out of which only N500 billion was within the banking industry.
“N2.7 trillion was held permanently in people’s homes,” Emefiele stated after he paid a visit to President Muhammadu Buhari in Daura, Katsina state, where both parties approved of a ten day extension for old currency swap.
Giving further explanations, the Apex bank Governor said “ordinarily, when CBN releases currency into circulation, it is meant to be used and after effluxion of time, it returns to the CBN thereby keeping the volume of currency in circulation under the firm control of the CBN.”
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He said since the commencement of the currency redesign and other monetary programmes, about N1.9 trillion have been collected, leaving us with about N900 billion (N500 billion + N1.9 trillion).
With the approval of the President, the deadline for the currency swap has been moved from January 31, 2023 to February 10, 2023.
Buhari had on Sunday, urged the CBN to allow more time, discretion and order to enable Nigerians successfully change their currencies to the redesigned notes, and reduce the risk of loss, especially among the underserved in rural areas.
