PRESS REMARKS BY GOVERNOR GODWIN EMEFIELE ON ISSUANCE OF NEW NAIRA BANKNOTES.

Good afternoon Ladies and Gentlemen, and welcome to this special press briefing of the Bank. We have called this gathering to inform relevant stakeholders and the general public of persisting concerns we are facing with the management of our current series of banknotes, and currency in circulation, particularly those outside the banking system in Nigeria.

As you all may be aware, currency management is a key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) of the CBN Act 2007. Indeed, the integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.

In recent times, however, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country. These challenges primarily include:

▪ Significant hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation is outside the vaults of commercial banks;

▪ Worsening shortage of clean and fit banknotes with the attendant negative perception of the CBN and increased risk to financial stability;

▪ Increasing ease and risk of counterfeiting evidenced by several security reports.

Indeed, recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier. In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.

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