By STEPHEN ADEBAYO Mar, 23, 2023 Finance

The CBN, which is responsible for overseeing the monetary policies of Nigeria, defines currency-in-circulation as all legal tender currency held by the public and in the vaults of Deposit Money Banks. This definition excludes currency held in the central bank's own vaults. The CBN further explains that it uses an accounting and statistical method that tracks withdrawals and deposits to calculate the currency in circulation in Nigeria.

The naira scarcity caused by the redesign of the banknotes led to a shortage of physical cash in the country, which affected businesses and individuals alike. Many people were unable to access cash for daily transactions, leading to a surge in the use of electronic payment systems. The CBN responded to the situation by increasing the supply of smaller denominations of banknotes to ease the cash crunch.

As the Monetary Policy meeting of the Central Bank of Nigeria (CBN) began, experts have advised the apex bank to reconsider its approach to currency management and avoid being overly confident about the resilience of the domestic economy.

The redesign of naira notes by the CBN had a significant impact on the currency situation in Nigeria, leading to a shortage of physical cash in circulation. However, the Supreme Court's recent ruling allowing the old banknotes to remain in circulation alongside the new ones is expected to ease the pressure on businesses and individuals who rely on cash for their daily transactions. The CBN's commitment to ensuring the smooth circulation of both old and new banknotes will be key in achieving this objective.

See more about The supreme’s court decision to about the naira scarcity

Tags: Nigeria currency naira redesign CBN

Share On Facebook Twitter Linkedin Whatsapp Telegram