The President, Major General Muhammadu Buhari (retd.), has explained why he initiated the new naira policy alongside the Central Bank of Nigeria.
Buhari, through a live broadcast on Thursday morning stated that his led administration found it necessary to initiate the naira policy which saw the redesigning of some selected naira notes because it sought to restore the ability of the CBN to keep a firm control over money in circulation.
He also revealed that since the implementation of the policy, the CBN has retrieved about N2.1 trillion money of the banknotes back to its system.
“The need to restore the statutory ability of the CBN to keep a firm control over money in circulation. In 2015 when this administration commenced its first term, Currency-in-Circulation was only N1.4trillion.
” The proportion of currency outside banks grew from 78%in 2015 to 85% in 2022. As of October 2022, therefore, currency in circulation had risen to N3.23 trillion; out of which only N500 billion was within the Banking System while N2.7 trillion remained permanently outside the system; thereby distorting the financial policy and efficient management of inflation.
“I have been reliably informed that since the commencement of this program, about N2.1 trillion out of the banknotes previously held outside the banking system, had been successfully retrieved,” he added.
Other reasons stated by him are, strengthening of our macro economic parameters; Reduction of broad money supply leading to a deceleration of the velocity of money in the economy which should result in less pressures on domestic prices; Lowering of Inflation as a result of the accompanying decline in money supply that will slow the pace of inflation; Collapse of Illegal Economic Activities which would help to stem corruption and acquisition of money through illegal ways; Exchange Rate stability; Availability of Easy Loans and lowering of interest rates; and Greater visibility and transparency of our financial actions translating to efficient enforcement of our anti- money laundering legislations.
entrusted with the process of implementation of the new monetary policy.”