Naira Redesign: CBN satisfied with level of currency in circulation – Shonubi

Acting Governor Fola Shonubi of the Central Bank of Nigeria (CBN) has expressed satisfaction with the current level of currency in circulation amidst an ongoing process of replacing old Naira notes with new ones.

During a press briefing following the Monetary Policy Committee meeting on Tuesday, Shonubi addressed questions about the Naira redesign process.

Shonubi stated that the central bank is quietly phasing out old banknotes and replacing them with new ones in a process devoid of fanfare.

• “When the currency is printed and sent out, it is expected that it will go through a number of cycles and then overtime will become worn and then would be replaced. That’s what we’re doing,” Shonubi explained.

The CBN is not increasing the amount of money in circulation but is simply replacing old notes that have reached the end of their lifecycle.

• “We believe that we have an optimal level of the currency out there so more of what’s being done is replacement to keep the level rather than just putting out money out there,” the acting governor stated.

June data from the central bank indicate currency in circulation is about N2.6 trillion while currency outside the banking system rose to N2.2 trillion from the periodic low of N792.1 billion achieved in January 2023.

Shonubi pointed to the banks’ balanced demands for new notes as evidence that the process is progressing smoothly.

• “The banks, whenever they come to us for notes, we provide it to them. If it wasn’t enough, they’ll be asking us for much more. If it was too much, they’ll be dumping that much more on us,” he said.

The CBN’s top official concluded by saying that Nigerians will see a gradual shift from old to new notes without a big announcement. “Slowly and over time, you will see the old notes phased out of the system with the new notes. That will be the norm and that would be out of practice without fanfare. You’ll just see it slowly morph from old to new,” Shonubi said.

This process of currency redesign aligns with the CBN’s wider strategy of efficiently managing the nation’s monetary policy, focusing on stabilizing the economy amidst ongoing challenges.

However, despite Shonubi’s assurance, many Nigerians report a lack of new notes in circulation.

• ATM machines across the country predominantly disburse older notes, and bank employees affirm that these are the majority of what they receive for distribution.
• Yet, new notes are regularly seen being dispersed at parties and significant events across various towns in Lagos.

This disparity raises questions about the real progress of the redesign process and its actual impact on the day-to-day life of Nigerians, providing a stark contrast to the seamless transition promised by the CBN.