Minister of Finance, Budget and National Planning of Nigeria, Zainab Ahmedopposed plans by the Central Bank of Nigeria (CBN) to change the design of some naira banknotes.

She said the ministry was unaware of the plan and only learned of it through the media.

She said this Friday when she appeared before the Senate Finance Committee for the Treasury Department’s budget defense session.

Her comments came just 48 hours after CBN President Godwin Emephile announced plans to redesign the 100, 200, 500 and 1,000 banknotes and put them into circulation in December.

The plan is to redesign the N100, N200, N500, and N1000 to start paying by December, and the old banknotes will be out of circulation by January 31, 2023.

He said the move aims to control the currency in circulation, control inflation and tackle counterfeiting.

Monetary controls face some daunting challenges and continue to escalate in size and sophistication, with unintended consequences for the integrity of both the CBN and the country, Emefil said. said.

CBN bosses further stated that the planned redesign was in line with Section 19(a) and (b) of the CBN Act 2007, and that CBN management was in charge of the redesign, production and approval of President Muhammadu Buhari. requested and obtained. A new series of N200, N500 and N1,000 level banknotes will be put into circulation.

Not consulted – Minister of Finance

But while answering questions about the proposed plan from committee member Opeyemi Bamidele (APC, Ekiti), Ahmed said the planned redesign of some naira notes portends some consequences. said it was.

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Bamidale noted that two days after the announcement, the conversion of naira to US dollars rose from 740 naira to 788 naira.

“The policy may have been well thought out, but the reality is that by 31 January 2023, the naira could drop to 1,000 naira to the dollar, confirming the full implementation of the policy. The timing is very wrong,” he said.

The finance minister said she and her finance ministry officials were not aware of the policy and only learned of it from the media.

“We have not been consulted by CBN with Treasury regarding the planned Naira redesign and cannot comment on merit or otherwise,” she said.

Also Read: Naira hits record drop again as CBN replaces naira notes

“As a privileged Nigerian at the top of Nigeria’s financial management, this policy unfolding at the moment portends a serious impact on the naira’s value relative to other foreign currencies,” she said. .

Mrs. Ahmed appealed to the Commission to ask the Governor of CBN for the necessary clarification regarding the merits of the planned policy and the justification for its current implementation or otherwise.

IMF urges caution

CBN’s plans to replace higher naira notes have drawn criticism over the period of the bank’s statements to allow users to replace older notes. But analysts are more talkative about the impact of the policy on the currency.Illegal money holders scrambled to turn their cash into dollars, further boosting the exchange rate and sending the naira weaken further.

Kingsley Mogul, former CBN deputy governor, said the short period of time allowed by the banks “could put a lot of operational pressure on the banks, and some traders would not want the new notes to come into circulation.” If that happens, we may reject existing banknotes prematurely.”

But he said, “This move is a necessary step to tighten the money supply and fight high inflation.”

According to Bloomberg, the International Monetary Fund has advised Nigeria to exercise caution to avoid mistakes that could undermine confidence in its financial system.

IMF Permanent Representative Ari Aisen said the IMF had reached out to CBN to obtain more information about the plans announced Wednesday.

“We stand ready to provide assistance if needed,” Bloomberg said.