Redesign Naira: CBN blames hoarding for scarcity
"Currency management is a cycle but we have not allowed the cycle to mature, because when you issue out currency as CBN, what we expect is that the Naira issued out will come back into the banking system again."
The Central Bank of Nigeria (CBN) has attributed hoarding of the new Naira notes as being responsible for its scarcity, and not that small quantity was issued out.
The CBN Director, Consumer Protection, Mrs Rashidat Mongunu, said this on Thursday while monitoring microfinance banks in Offa, Offa Local Government Area of Kwara.
CBN Director, Consumer Protection, Mrs Rashidat Mongunu, briefing the Olofa of Offa, Oba Mufutau Gbadamosi, on the new Naira policy on Thursday in Offa, Kwara.
Supreme reports that the monitoring team first paid homage to the Olofa of Offa, Oba Mufutau Gbadamosi, before heading to Stockcorp Microfinance and Ibolo Microfinance banks.
She said the redesigned notes were already made available by the CBN, but it is those hoarding it that make it scarce and people now throng banks to collect money almost at the same time.
”Because of the attitude of some Nigerians in hoarding the money, even those that don’t really need the money are rushing to get it and keep, not to spend.
”Currency management is a cycle but we have not allowed the cycle to mature, because when you issue out currency as CBN, what we expect is that the Naira issued out will come back into the banking system again.
”But now, everybody collecting the Naira is hoarding it. So, no matter how much Naira we put out there, if we continue with this attitude and the CBN issue from now till December, it will still not be enough.
”And you know that in every economy, you must have a proper accountability on the indent.
”You just don’t issue out Naira for the fun of it, you issue the amount that is commensurate with the level of activity you have in that country,” Mongunu said.
The CBN director added that the situation could only get better when people started spending money already hoarded because enough money was already in circulation.
”There is Naira out there. I have been in Kwara for over three weeks and we have been allocating money daily.
”The truth is that if the currency is circulating the way it should and not being hoarded, we shouldn’t have a problem.
”The only thing is for us to change our attitude because it can only get better when people start spending the money they have hoarded,” Mongunu stressed.
She added that the CBN was already engaging traditional rulers to sensitise their people to have a positive attitude and be confident that the Naira redesign policy was not to punish anyone but to better the economy.
Responding, the traditional ruler said the extension of the legality of the old notes from Jan. 31 to Feb. 10 was responsible for the problems people are facing currently.
He said people had already deposited all that they have on Jan. 30 in anticipation to start spending the new notes on Feb. 1, hoping that it will be available, but it’s not so.
Oba Gbadamosi however advised that if the CBN want the policy to be received with open arms and successful, it should make the new notes available for people to spend.