source: pixabay
CBN trying to redesign Naira, am I surprised? Not one bit, our leaders are quite funny and this isn't a first
Amid this hard-hitting economic crisis and so many unresolved problems arising daily in Nigeria, how is redesigning the currency note a concern, we are practically falling apart (if only Chinua Achebe is here, he would have understood and probably given us a volume 2 ), waking up every morning to heartbreaking news every day.
Indeed the integrity of a local legal tender, the efficiency of its supply as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great central bank, according to statistic 85℅ of the money in circulation is outside the vault of the commercial bank that is
2.7 trillion Naira out of 3.23 trillion Naira is outside the fault of the commercial bank and is supposedly held by a member of the public. The redesign of the currency will help deepen the drive to entrench a cashless economy as it will be complemented by increased minting of our E-naira, redesigning the currency is the CBN plan to mope the currency not in the vault of the commercial bank so they can take full control of money supply again.
How did the money in circulation practically double, in short, more than double and they are waking up to realizing it now? How is it possible that 85% of the money in circulation is being held by the public? What public?
Is it the public that has been constantly crying out for help and struggling for survival?
Who printed that much money for it to be in circulation? And for it to be in circulation, that means there was a release, because there is clearly an accounting approach to computing CIC.
Although global best practice is for central banks to redesign, produce and circulate new local legal tender every 5–8 years, the Naira has not been redesigned in the last 20 years.
I understand the purpose of redesigning is to keep the counterfeiting levels low seeing this is a threat and I deeply hope that is the plan.
Source:designed using canvas
This will cause a ripple effect. If this is an act to force people who hoard cash out, there will be a massive increase in the exchange rate, it may be a strategy to curb inflation but the question remains, how effective will it be? is it really necessary at this point?
By Dec 15 2022 the new currency design will be in circulation and by January 31, 2023, the existing currency shall cease to be legal tender.
Bank customers are advised to begin paying in the existing currency to enable them to withdraw the new banknote once circulation begins in mid-December 2022
For the purpose of the transition from the existing currency to the new note bank, charges for cash deposits without limit are suspended with immediate effect.
According to the Governor of CBN, they are not sure how effective it'll be on the value of the Naira, but they're hoping it will. This may be a game changer next year if rightly implemented faithfully and transparently, however, every decision has its pros and cons.
Source: Designed using Canvas
"What chance do we stand that this will work in our favor or it will be another project that will swallow millions to accomplish?"
Bypassing it
Nevertheless, this should be taken seriously because whatever cash you have will be useless come February 2023, if you miss depositing your cash after the stated deadline.
I thought I'd share 3 ways you can bypass it
_Store your money in the bank
_Invest in Crypto Stables
_ Invest it in your business (Get goods, if you're into buying and selling)
So here you have it, this is me ranting, thank you for reading, and what are your thoughts on the redesign of the currency that's being made by the CBN