CBN disburses smaller naira notes to traders to end scarcity
Enhances inter-bank market again with $210m
To check rising inflation, the Central Bank of Nigeria (CBN), Tuesday began the disbursement of smaller naira notes to traders in order to improve the circulation of N5, N10, N20, and N50 in the market.The development came on the day the apex bank again boosted the interbank foreign exchange market with the supply of $210million to maintain liquidity, and help boost the value of the Naira.
To this end, the Acting Director, Currency Operations Department, CBN, Mrs Priscilia Eleje, conducted the disbursement of the lower Naira Bills at a publicity campaign on, “Disbursement of Lower Denominations of the Naira, at the Wuse Market, Abuja.She said the campaign was targeted at the informal sector, especially traders, with the aim of increasing the circulation of the smaller units of the naira to make doing business easier.
According to her, the Federal Capital Territory will be used as the pilot stage of the new campaign, and if successful, will be replicated nationwide.Eleje said the new strategy would ensure that traders desist from hiking prices of goods, simply to avoid looking for “change.’’According to her, new naira notes will be distributed to traders within Wuse and Garki markets, and others through their associations.
“The notes we will be disbursing are mints. This money is not meant for you to keep in your house or to go and spray at weddings or sell.“We have our operatives everywhere, and whoever is caught selling these notes will be prosecuted.
“These notes are meant to be used for daily transactions so that when a customer comes to the market, you won’t tell him or her that you don’t have change,” she said.Eleje said the money was not free, adding that rather, the CBN through the various associations in the market would exchange lower denominations for larger ones.
Also, the Deputy Director, Currency Operations Department, CBN, Vincent Wuranti, counseled the traders on ways to handle and maintain the naira notes.He chided all users to desist from squeezing the notes, writing on them, or using dirty hands to handle the notes, while also urging the public to inculcate the habit of using wallets in order to safeguard the naira, and allow it to have a longer life span.
The Chairman, Wuse Market Association, Rapheal Okoro, said insufficient lower denominations of the naira, was one of the greatest problems being faced by traders.He said: “When you buy something you cannot get change. There are instances where customers change their minds about buying items because of change.“As a trader, you lend another trader change and he cannot give you back when you need it. This has led to a lot of crisis in the market. So we are happy that the CBN has come up with this plan.”
Okoro commended the CBN for agreeing to make the funds available to traders on a weekly basis, based on demand.
In a related development, the apex bank once again made interventions in the inter-bank sector of the Foreign Exchange market with the injection of $210million into three segments of the market.A breakdown of the Bank’s latest round of intervention indicates that the CBN offered the sum of $100million to dealers in the wholesale window, $55million to Small and Medium Enterprises (SMEs), and the invisibles segment, comprising Business/Personal Travel Allowances, school tuition, medicals, etc., $55million.
The CBN spokesman, Isaac Okorafor, said the Bank would continue to make the interventions, as the country’s reserve has enjoyed accretion in the past weeks, bringing the figure to about $42billion.
Okorafor was upbeat that the Bank’s forex management strategy was yielding the desired result; hence, it would continue to sustain activities in the market in order to maintain stability and liquidity. Speaking on the goal of convergence between the rates at the inter-bank, and Bureau de Change (BDC) segments, he said the CBN was working hard to achieve the objective, and expressed belief that the rates in both markets would eventually merge in due course.
Meanwhile, the naira continued to maintain its stability in the FOREX market, exchanging at an average of N360/$1 in the BDC segment of the market on Tuesday, February 27, 2018. In the past two months, the CBN has maintained a twice weekly intervention in Forex market in the country.