Naira Scarcity: Latest CBN News Update on Naira Notes Today 24 March 2023
Following the Naira scarcity in Nigeria today, GoldenNewsNg has compiled Latest CBN News Update on Naira Notes Today 24 March 2023
This scarcity of Naira notes was mainly due to the shortage of foreign exchange reserves, which led to a decline in the value of the Naira in the foreign exchange market. This situation led to the hoarding of Naira notes by individuals and businesses, causing a scarcity of cash in circulation.
To address this issue, the Central Bank of Nigeria (CBN) had taken several measures, such as increasing the supply of foreign exchange reserves, implementing stricter regulations on currency exchange, and encouraging the use of electronic payment systems. The CBN had also introduced new Naira notes with enhanced security features to curb counterfeiting.
Despite persistent queues in some banks and ATMs across Nigeria, some normalcy has returned.
Bank officials have disclosed that the Central Bank of Nigeria (CBN) has supplied more old naira notes than the newly redesigned N200, N500, and N1,000 notes.
This is due to the ruling of the Supreme Court on March 3, 2023, which extended the validity of the old naira notes till December 31, 2023.
Banks have begun dispensing the old naira notes, which is being accepted by traders, transporters, petrol stations, and others after initial skepticism.
However, banks say they need more new naira notes as both ATMs and bank tellers are dispensing more of the old naira notes. President Muhammadu Buhari recently stated that the scarcity of naira notes has reduced the incidence of vote-buying. However, the naira scarcity has led to crisis nationwide, in which many Nigerians have lamented their inability to buy necessities or move around, with the Central Bank of Nigeria coming under heavy criticism for the policy, which many described as ill-timed and poorly implemented.
Currency in circulation drops to N1.38tn – CBN
According to figures obtained from the Central Bank of Nigeria (CBN), the total amount of currency-in-circulation in the country dropped from N3.29tn as of the end of October 2022 to N1.38tn as of the end of January 2023 due to the naira redesign policy. This represents a drop of N1.91tn in the three-month period.
The Governor of the CBN, Godwin Emefiele, had announced plans to redesign the old N200, N500 and N1,000 notes in October 2022, and also set deadlines for Nigerians to swap their old notes with the new ones. The CBN has urged Deposit Money Banks to return the existing denominations of the currency and start issuing the new banknotes on a first-come-first-serve basis.
Emefiele had also expressed concerns about the challenges associated with currency management, including the significant hoarding of banknotes by members of the public. Statistics showed that over 80 per cent of currency-in-circulation was outside the vaults of commercial banks.
IMF projects N4.26tn as currency outside banks
The International Monetary Fund has predicted that despite the Central Bank of Nigeria’s naira redesign policy, the amount of currency outside the banking system will reach N4.26tn in 2023. In its report, ‘Nigeria: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nigeria’, the IMF maintained that there would be a rise in the volume of currency outside banks, despite the CBN’s aggressive efforts to increase the amount of cash in the banking system and reduce the amount in the public’s hands. The report projected that the money outside of the banking system would increase from N2.94tn in 2021 to N7.66tn by 2027, with estimates of N3.54tn in 2022, N5.1tn in 2024, N6.08tn in 2025 and N6.99tn in 2027.