Adedokun Waliyu 
Plans to reduce volume of higher denomination notes in circulation to curb inflation MPC hikes interest rate to 16.5%.
The newly redesigned Naira notes of N200, N500 and N1,000 will come into use today, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele made this known yesterday at the end of the last Monetary Policy Committee (MPC) meeting in Abuja.
He said President Muhammadu Buhari will unveil the new Naira notes at 10am in the Council Chambers during the Federal Executive Council (FEC) meeting.
Emefiele did not give any reason for bringing forward the unveiling of the new Naira notes from December 15, 2022, he however said that the January 31, 2023 date when the old notes will cease be legal tender remains unchanged.
Speaking on the effect of the circulation of high denomination notes on the economy, Emefiele said the prevalence of high denomination notes in transactions may be responsible for inflation in the country.
Going forward however, the CBN governor said higher denomination notes will still be printed but overtime, will reduce their number in circulation. This he said is to encourage the use of lower denomination notes and invariably trend inflation downwards.
Emefiele thanked President Buhari for always defending the apex bank, stating that “President Buhari has come out twice to defend the CBN” when the bank was under attack for the decisions it took. One of such decisions was the redesigning of the Naira notes.
He also thanked the senate for supporting it and “the security agencies particularly the Economic and Financial Crimes Commission (EFCC) for seeing to the smooth transition of the programme”.
Asked if the CBN will consider extending the deadline for the deposit of old notes by Nigerians in diaspora, the CBN governor rules out that possibility saying that “we will not wait for Nigerians in diaspora to bring in old notes because they don’t spend Naira. There will be no shift in deadline, what we have done is not against the law”.
Also for the third consecutive time this year, Emefiele announced another interest rate hike to 16.5 percent while retaining other parameters.
The reason for increasing interest rate he said, is because the previous decisions of the CBN to tackle inflation by increasing interest rates have started yielding positive results with the difference between each inflation figures trending downwards.
According to him, “we feel comforted that the rate of increase in inflation is moderating gradually in Nigeria, for instance between June and July the rate of month on month inflation was 1.82 percent between July and August the rate of month on month inflation was 1.7 percent, between the month of August and September the month on month rate of inflation was 1.3 percent and between September and October the month on month rate of inflation was 1.2 percent”.
