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Naira redesign: 85% of currency in circulation outside banking system – Emefiele

GOVERNOR of the Central Bank of Nigeria (CBN) Godwin Emefiele has revealed that 85 per cent of the currency in circulation in Nigeria was outside the banking system. 

Emefiele spoke on Friday, November 25, at the 57th Annual Bankers Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.

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He assured that the redesigning of the naira will curb hoarding of banknotes.

Emefiele said, “Analysis of the key challenges primarily indicated a significant hoarding of banknotes, as over 85 per cent of the currency in circulation were held outside the banking system.

“This is even as currency in circulation more than doubled from N1.46 trillion in December 2015 to N3.23 trillion in September 2022, a worrisome trend that must be curbed.”

According to him, the redesigned notes will also help rein in inflation.

He, therefore, said the policy would quicken the attainment of a cashless economy as it was complemented by increased minting of the eNaira.

Emefiele also said the steady increase in headline inflation in September was in tandem with global trends.

He said upside pressure on consumer inflation re-emerged during the year as global conditions complicated existing local imbalances to undermine price stability.

“Food remains the significant component of the domestic consumer price basket. The annualised uptick in headline inflation mirrors the 6.21 percentage points upsurge in food inflation to 23.34 per cent in September.

“During this period, core inflation also resumed an upward movement from 13.87 per cent in January to 17.60 per cent.

“In addition to harsh global spillovers, exchange rate adjustments and imported inflation, inflation was also driven by local factors such as farmer-herder clashes in parts of the food belt region,” he said.

Emefiele said during the early part of 2020, the world economy experienced the most significant downturn since the Great Depression following the outbreak of the COVID-19 pandemic.

He said the war and the sanctions placed on Russia by the US and its allies led to a spike in crude oil prices.

He added that there were growing restrictions on food exports because of the food, energy, and cost-of-living crises in many countries.

President Muhammadu Buhari unveiled the new currency notes on Wednesday before the federal executive council (FEC) meeting at the state house, Abuja.

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