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CBN Cites Hoarding, Counterfeiting As Reasons For Redesigning Naira

The Central Bank of Nigeria (CBN) has cited significant hoarding of naira, worsening shortage of clean and fit banknotes as well as the ease of counterfeiting as the reasons behind the decision to redesign and reissue N100, N200, N500 and N1000 notes.

The CBN Governor, Godwin Emefiele, who announced the apex bank’s decision to redesign and reissue the higher denominations of naira on Wednesday in Abuja said, “In recent times currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.”

Emefiele, who stated that hoarding of banknotes by members of the public had resulted in over 80 per cent of currency in circulation being outside the vaults of commercial banks, added that “As at the end of September 2022 available data at the CBN indicate that N2.7 trillion out of N3.23 trillion currency in circulation was outside the vaults of commercial banks across the country and supposedly held by members of the public.”

Continuing, he said, “Evidently, currency in circulation has more than doubled since 2015, rising from N1.46 trillion in December 2015 to N3.23 trillion as at September 2022. I must say, that this is a worrisome trend that cannot continue to be allowed.”

He added that the worsening shortage of clean bank notes had negative effect on the perception of the CBN with the attendant increased risk to financial stability. The CBN helmsman stated further that the current banknotes were easy to counterfeit as evidenced by several security reports.

“Indeed recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier. In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes,” he said.

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