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CBN News Update On Naira Notes Today Thursday 13th April 2023
Latest CBN news update on New Naira Notes today, Thursday 13th April 2023, can be accessed below.
Following the controversy associated with the new naira notes rages on, News Rain Nigeria brings you the latest update from Central Bank of Nigeria (CBN) on naira notes.
Below are the latest CBN news update on new Naira notes today
CBN makes adjustments as Naira exchanges at an all-time low against US dollar
It is possible that the Central Bank of Nigeria (CBN) has reduced the official exchange rate of the Naira against the US dollar. Since April 1, 2023, the Naira has been trading at a historically low rate against the dollar, surpassing N463. This is a contrast to the previous month’s exchange rate, which was within the range of N461 to a dollar.
IMF Urges CBN to Sustain Anti-inflation Campaign Ahead of Tinubu’s Presidency, Makes Prediction
The IMF has recommended that the Central Bank of Nigeria (CBN) continue its anti-inflation campaign as Nigeria prepares for the expected presidency of Bola Tinubu on May 29th, 2023. This advice was given by Pierre-Oliver Gourinchas, the director of the IMF’s Research Department, during the release of the World Economic Outlook report at the ongoing IMF/World Bank Spring meetings in Washington DC. The report predicted that Nigeria’s economy would grow at 3.2%, but noted that the growth would fall to 3.0% in 2024 when the new administration fully kicks off.
The IMF advised the CBN to continue increasing interest rates to address Nigeria’s inflation rate, which remains at one of its highest levels in history. Despite the bank’s monetary policy interest rate hike from 16.5% to 18% in March 2023, the inflation rate reached 21.91% in February 2023. The IMF believes that further interest rate increases will help bring down inflation. Daniel Leigh, Division Chief of the Research Department, recommended tightening monetary policy to bring inflation down towards target levels.
Naira Redesign Was Done In The Interest Of Nigerians – CBN Declares
During the 34th Enugu International Trade Fair, the Central Bank of Nigeria (CBN) Acting Director of Corporate Communications, Dr. Abdulmumin Isa, stated that the naira redesign policy was implemented in the best interest of Nigerians and was a step in the right direction.
He also mentioned that the redesign led to stability in the exchange rate and supported security agencies in combating banditry and ransom-taking.
Mr. Esu Imoh, Assistant Director of Corporate Communications, represented the CBN Director and highlighted that the redesign adheres to international best practices. In response to the growing usage of online banking facilities by Nigerians, the CBN confirmed that the Nigerian payment system infrastructure is sufficiently robust to handle the increasing pressure.
However, Mr. Jasper Nduagwuike, the President of Enugu Chamber of Commerce, Mines, Industries, and Agriculture, expressed concern over the recent increase in interest rates to 18 percent, which was an aggressive move by the CBN to contain Nigeria’s inflationary pressure. He cautioned that this high-interest rate regime could negatively impact businesses’ access to bank credit.
Although they commended the CBN’s measures to rebuild stronger business confidence and ensure stability in the economy, particularly in the financial/banking sector, Mr. Nduagwuike advised the CBN to utilize the grace period for full implementation of the naira redesign and cashless policy as directed by the Supreme Court of Nigeria.
CBN lists gains of naira redesign
The Central Bank of Nigeria (CBN) has stated that the recent redesign of some Naira denominations is positively impacting the country’s economy, supporting macroeconomic fundamentals, moderating inflation, and increasing financial inclusion rates.
The policy is in line with international best practice and has also helped security agencies combat banditry and ransom-taking in the country.
The CBN is encouraging Nigerians to embrace alternative payment channels, such as eNaira, USSD, and internet banking facilities, as the world moves towards alternative payments.
Under the Anchor Borrowers’ Programme (ABP), the bank has sponsored over 4.6 million smallholder farmers across 21 agricultural commodities on 6.02 million hectares of farmland.
The Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA) commended the CBN for its policy measures to ensure stability in the economy, particularly in the financial and banking sectors
Currency risk: Firm dumps naira for dollar
Nigerian aviation firm, Falcon Aerospace Limited, has adopted the US dollar as its transaction currency to protect itself from the risks associated with the Nigerian naira. Its CEO, Chukwuerika Achum, said the company’s services are priced in dollars as it provides a natural hedge against currency devaluations.
Falcon Aerospace has launched technology platforms – Vivajets, CharterXE, and FlyPJX – to ease business jet booking and promote inclusive access to its services. The firm has focused on meeting increased demand for business aviation in Africa by non-African and African customers. The company aims to “democratize” business aviation and make the service accessible and affordable to more people.
The Central Bank of Nigeria (CBN) has recently made an announcement to address the increasing incidents of fraud in the financial sector. As part of their efforts to combat this problem, the CBN has planned to close millions of bank accounts that are not linked to a Bank Verification Number (BVN).
CBN tight monetary policy affecting banks’ profits, says operator
The CEO of Cowry Asset Management, Johnson Chukwu, has said that more Nigerian banks will pursue cross-border expansion due to the Central Bank of Nigeria’s adoption of a hawkish monetary stance.
The CEO explained that the hike in the benchmark interest rate has led to higher lending yields and consequently eaten into banks’ net interest margins, spurring Nigerian banks to move into other African markets to benefit through risk diversification and greater profit opportunities for shareholders.
The adoption of Holdco structures by many local lenders will help swathe the increasing competition from fintech and diversify their earnings in the face of the present tight monetary policy regime, thus enhancing their topline.
The banking sector has seen an upsurge due to the increase in transactions electronically and through several payment options.
Rising Competition and Tight Monetary Policy Drive Nigerian Banks to Pursue Cross-Border Expansion and Holdco Structures
The Central Bank of Nigeria (CBN) is planning to introduce a regulation that will make it harder for financial institutions to convert to a holding structure, as more banks are showing interest in operating a holding company structure.
Currently, eight commercial banks are either fully operating a holding structure or finalising their holding company structure. However, the CBN is not comfortable with the increasing number of banks applying for the structure, and the regulation aims to provide clarity on the requirements for changing operating licences for banks and Other Financial Institutions (OFIs).
The draft guidelines state that eligible financial institutions are not permitted to expand or reduce their current banking network or engage in any banking activity specific to the proposed new licence during the conversion process, except in line with the bank’s conversion strategy submitted to the CBN.
Naira crisis: Cash circulation low, NLC tells CBN
The Central Bank of Nigeria has been given a two-week ultimatum by the organized labour to provide adequate cash, failing which its offices will be picketed, as per a warning issued by the labour. Adewale Adeyanju, Vice–President of the Nigeria Labour Congress, said that the congress is keeping an eye on the cash supply to commercial banks by the CBN and that the current cash flow is not meeting expectations.
However, he also acknowledged that the situation has improved compared to the past few weeks. The scarcity of naira notes has exacerbated the country‘s hardship, and a few weeks ago, the NLC announced its intention to picket CBN state offices nationwide.
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