By Chinwendu Obienyi
Despite public calls to extend the deadline for ending the use of old naira notes (N200, N500 and N1000), the Central Bank of Nigeria (CBN) has insisted that the January 31 end date remains unchanged.
CBN Governor Godwin Emefiele stated this during the first Monetary Policy Committee (MPC) meeting which was held in Abuja on Tuesday.
Emefiele when quizzed on whether the apex bank would extend the deadline, said, the CBN together with the Presidency felt that 100 days was enough for people who had old notes to deposit these monies in the bank.
He noted that the bank took several measures and embarked on various strategies to banks remained open to accepting the old notes.
“We do not see any reason for a shift or extension because we did enough to encourage Nigerians to bring these old notes to the bank. At the initial stage, we observed that banks were paying these new notes to their priority customers and we ordered them to stop over-the-counter withdrawals and told them to dispense these notes via their ATMs. That worked but when new notes finishes, we told them to put in the old notes to ensure that customers can still withdraw money to go about their needs.
We then changed tactic and mandated them to dispense only new notes because we disbursed huge volumes of new notes to them which is currently running”, He said
According to him, there is an adequate quantity of new notes available for collection at the ATMs.
“Are we producing? Yes, our mint is producing and we are supplying them to the banks. This is a process and we have already embarked on strategies to help the weak and vulnerable Nigerian. Our sensitization programmes, use of super agents for cash swaps, exchanges will continue even after January 31.
“So money is circulating in these communities as well as the rural areas. This, we will not be extending the deadline. We will make sure these new notes circulate around the country and that is our focus for now.”, the CBN Governor said.
Meanwhile, borrowing is set to get more expensive as the MPC of the CBN voted on Tuesday to continue its increase in the benchmark interest rate by 100 basis points to 17.5 per cent.
The two-day meeting which was attended by CBN’s 12 MPC members believes the new interest rate will curb the accelerating rate of inflation and improve Nigeria’s exchange rate.
Some analysts had expected the CBN to hold rates steady after raising the interest rates four times last year to combat rising inflation.
However, Emefiele said the decision of the MPC include; increasing the Monetary Policy Rate (MPR) by 100 basis points to 17.5 per cent while an asymmetric corridor of +100/-700 basis points around the MPR was retained.
The CBN also retained CRR at 32.5 per cent while the liquidity ratio was also kept at 30 per cent. The latest increase is the 5th in recent months and the highest level since 2000.
The decision came after inflation dipped for the first time in 11 months in December 2022. Also, the apex bank has been trying to strike a balance by reining in inflation without choking off lending to the private sector which could top the economy into recession ahead of elections which are set to hold next month.
However, Emefiele said members of the committee did not think the decline was big enough to justify either holding or decreasing the rate.
“Yes we are happy with the figure recorded in December, but a cursory look at other underlying indices does not give us enough reason to celebrate. We will continue to aggressively rein in inflation,” he said.