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Economy | Monetary Policy

Changing the Design of Nigeria's Currency will have No Effect on the Economy - Ayo Teriba

Oct 31, 2022   •   by Ottoabasi Abasiekong   •   Source: WebTV   •   eye-icon 489 views

The Central Bank of Nigeria's (CBN) decision to redesign the N200, N500 and N1000 naira notes by December 15, 2022, will have no significant effect on the real sector and the economy.

 

Dr. Ayo Teriba, an economist, made this point while speaking on an Arise TV program discussing the developing story around the monetary policy decision to issue new naira notes.

 

The CEO of Economic Associates said the Ministry of Finance owns 100% equity in the Central Bank of Nigeria. 

 

He decried that the Ministry of Finance was not carried along on the decision, stating that there is no country in the world where significant conversations around the currency are discussed without the finance ministry or treasury department.

 

According to him, Central Banks in developed economies like the United States of America and the United Kingdom engage their respective finance ministry or treasury department before making critical monetary policy decisions.

 

"I cannot see any positive benefit of what the CBN is doing, I cannot see the necessity for it, and the sensible thing to do is to replace the old notes with coins and introduce larger denominations to reduce the currency in circulation," Teriba noted.

 

He argued that the timing for redesigning the new currency by December 15, 2022, was wrong, as it will add to the socio-economic shocks for households in Nigeria, who are grappling with rising food inflation, currency devaluation, low purchasing power and slow economic activities.

 

The economist said it was insensitive to implement such a policy during the end-of-the-year festive season.

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