Old naira is responsible for CBN’s ineffective monetary policies – Expert

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A development economics professor has claimed that the delay in redesigning the naira has rendered the Central Bank of Nigeria’s monetary policy ineffective.

Teacher. Ken Ife revealed this during the Godfrey Okoye University Tenth Convocation Lecture, with the theme: Nigeria: The State of the Macroeconomy.

He indicated that the delays in the redesign caused 80% of the currency in circulation to be left outside the bank. He added that 40% of the nation’s money is unbanked, while 40% of citizens live below the poverty line.

  • The question: He said, “The redesign of the naira should be five years, but for 20 years we haven’t done it.”

He also claimed that counterfeit naira could outnumber legitimate money in circulation, making it impossible for the CBN to know how much is in circulation.

The economist said that the activities of money launderers and ECOWAS politics had also led to the naira being used in other countries without supervision.

  • “All this has made the transmission of monetary policy in the country a challenge and forced commercial banks to lend at a higher rate.
  • “Money laundering, intense speculation on the value of the naira, frequent ransom demands by kidnappers, and the naira as a second currency in the 15 ECOWAS countries are making our currency amounts difficult.” said the expert.

Causes of inflation: He said that structural factors such as lack of power, poor roads, water, rail transport and rising costs were to blame for the country’s cost inflation, which was exacerbated by a 300% increase in prices. diesel prices.

He stated that 68% of manufacturers provide 100% of their power all the time, which drives up the prices of their products.

  • He said, “Our economy’s import dependency places us on the transmission belt of the global exogenous supply chain, which aggravated the inadequate supply of dollars.
  • “This will help narrow the gap between official and black market exchange rates.” He noticed.

For the record: The Central Bank of Nigeria (CBN) has ordered commercial banks in the country to remain open on Saturdays until January 31, 2023, to allow bank customers to exchange old naira notes for new ones.

… Old naira is responsible for CBN’s ineffective monetary policies – Expert Read More on … Naijaonpoint.

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