THE FIGHT TO SAVE THE NAIRA IS REIGNITED AS NEW CURRENCY NOTES

President Muhammadu Buhari unveiled the new currency notes, the Central Bank of Nigeria raised interest rates, and the Economic and Financial Crimes Commission redoubled its efforts to combat currency speculators last week in an effort to control the value of the naira, according to Festus Akanbi.

The ongoing efforts to stabilize the naira's value received more traction last week thanks to a variety of steps made by the monetary authorities in response to the Central Bank Governor, Mr. Godwin Emefiele's, October hint to revamp the naira and stop the local currency's decline in value.

Many Nigerians were shocked on Tuesday when the governor revealed that President Muhammadu Buhari would present the new currency notes on Wednesday instead of the earlier date of December 15 as previously announced by the CBN.

Emefiele dropped the clue while outlining the apex bank's monetary policy committee's conclusions, which increased the monetary policy rate (MPR) by 100% basis points to 16.50%.

When President Buhari officially unveiled the new currency notes, the N200, N500, and N1000, to Nigerians on Wednesday at the Federal Executive Council meeting at the Presidential Villa in Abuja, local financial analysts were still analyzing the effects of the interest rate increase.

The CBN governor revealed that there will be strict limits on the amount of cash that can be withdrawn over the counter at a briefing held after the ceremony but before the Federal Executive Council meeting because the bank will be closely monitoring the reason behind any large transactions with the help of the Economic and Financial Crimes Commission (EFCC).

He said that the newly designed currency notes cannot be counterfeited and added that the CBN will redesign the notes every five to eight years to prevent this from happening.

The CBN governor declared that the apex bank is now more determined to turn Nigeria into a cashless economy, as in other climes, following the unveiling of the new notes that went into circulation as of last Wednesday.

President Buhari stressed the value of redesigning the new naira notes during the event that took place before the council meeting. He outlined how it will help the nation combat corruption and illicit money flows, strengthen its economy, and ensure that the value of the naira increases.

The local currency declined to as low as N890 per dollar at the illegal market and N446/1$ at the official market, known as the Investors and Exporters (I&E) FX window, after the CBN announced plans to redesign and replace the country's banknotes.

After the authorities earlier unleashed the EFCC against currency speculators and hoarders, analysts saw Wednesday's event as the cherry on top of a coordinated effort to stop the present drop in the value of the naira.

After the CBN revealed intentions to redesign and replace the country's banknotes, the local currency declined to as low as N890 per dollar at the black market and N446/1$ at the official market, known as the Investors and Exporters (I&E) FX window.

Analysts referred to Wednesday's development as the cherry on top of a concerted attempt to stop the present decline in the value of the naira after the authorities had earlier unleashed the EFCC against currency speculators and hoarders.

The Riot Act is read to speculators by the EFCC

Abdulrasheed Bawa, the chairman of the EFCC, reiterated the EFCC's determination to crack down on currency speculators as the countdown to the deadline for the exchange of old notes for new ones continued. Bawa expressed his belief that the new naira policy would result in the currency's appreciation.

In order to reassure Nigerians, Bawa added, “We promise them that we are always prepared to receive reports of any person with suspicious hidden money, and if examined and confirmed to be real, we will give them 5% of the money.”

Positive Analysis of CBN's Monetary Policies

The CBN's decision to raise the interest rate is based on its ongoing efforts to tame Nigeria's stubborn inflation, which has not relented despite consistent increases in interest rates in the past six MPC meetings, according to the Managing Director/Chief Executive, MD/CEO SD&D Capital Management Limited, Mr. Idakolo Gbolade. According to him, the work is also focused on cleaning up the economy's surplus liquidity. He thinks the CBN is trying to increase investor confidence and profitability expectations in relation to foreign inflows, which can help our foreign reserves.

However, he voiced concern that the MPC decision would further lead the Naira's value to keep falling because of the ongoing lack of dollars.

Gbolade, however, argued that “if the foreign investors positively assess the new MPC decision, it could herald a turnaround for the Naira as the much-needed investment in a foreign currency will start coming into the system.”

ABCON Advocates for Forex Market Participation

The Association of Bureau de Change Operators reaffirmed its lobbying efforts last week in an effort to gain prominence in the CBN's initiatives to purge the foreign exchange market and reposition the local currency.

Aminu Gwadabe, the president of ABCON, told THISDAY in an interview that he is confident in the CBN's ability to stop the current decline in the value of the naira because it has a variety of monetary policies in place to counteract the effects of foreign exchange rate volatility, inflationary pressures, dwindling buffers, etc.

He asserts that the announcement of oil discoveries and other resource exports in the country's north is a positive omen and says that the naira's fortune would be much improved by taking advantage of the benefits through effective coordination and fiscal restraint.

He stated with confidence that the effort would raise the value of the local currency that the apex bank's consistency with the interest rate increase to control inflation and attract foreign capital in higher investment yields instruments has started producing positive impacts in the bonds and stock market.