•To reassess CIC’s optimal level
By Chinwendu Obienyi
The Central Bank of Nigeria (CBN), on Tuesday, said it will continue to pump the newly redesigned notes into the economy but will reassess the optimal level of the currency in circulation (CIC).
This was even as it revealed that the value of eNaira transactions since it’s launch has reached almost N22 billion.
Its Governor, Godwin Emefiele, stated this during the 147th Monetary Policy Committee (MPC) meeting which held in Abuja.
Despite the apex bank’s official statement on the ruling of the Supreme Court, Nigerians are still finding it difficult to access cash as banks across the country complained that the current demand for bank notes is higher than the supply it is getting from the CBN.
Fielding questions from newsmen on the aftermath of the Supreme Court’s judgement on the Naira notes, Emefiele noted that the CBN remains committed to ensured a stable financial system and will continue to pump the newly redesigned notes amid the Court’s judgement.
He said, “Before the Naira redesign, there was about N3.23 trillion in circulation, out of which N500 billion was held in the banking system and N2.73 trillion held outside the banking vaults. The CIC is roughly close to N1 trillion and the CBN will continue to pump the newly redesigned notes into the economy. Although, we need to re-assess whether the CIC has obtained optimal level so that we ensure we put in place measures that we do not have people or banks hoarding notes for their personal use”.
Commending Fintechs for coming to the aid of banks as regards online transactions, Emefiele noted that the failed transactions were as a result of the deluge volumes of transactions that hit the banking industry and added that the down-time issues are currently being resolved to ensure smooth transactions.
Speaking on the adoption rate of eNaira, the CBN Governor revealed that the eNaira has emerged the electronic payment channel of choice for financial inclusion and targeted social intervention programmes.
According to him, within the last 18 months, about 13 million wallets has been recorded while the value of eNaira transactions has risen by 58 per cent.
“We have recorded 13 million wallets categorized based on level of usage. We have about 12.6 million wallets at tier-zero, 11,354 at Tier-1, 367,000 at Tier-2 and 9,649 at Tier-3. The Ministry of Humanitarian affairs have shown keen interest in the eNaira. As at March 20, 2023, approximately 4 million wallets were created for social intervention payments representing about the total of 30 million wallets created so far.
The value of eNaira transactions has reached almost N22 billion which is a 58 per cent increase. This year, over N10 billion of it has been minted and about N3.43 billion of it is currently in circulation and so there is good progress in the adoption of the eNaira”, Emefiele said.
Whilst explaining the MPC’s decision to raise the Monetary Policy Rate (MPR) by 50 basis points, Emefiele stated that the members were unanimous in raising rates as they cited price and exchange rate pressures and expectations of a removal of petrol subsidy behind their decision.
According to the CBN Governor, the apex bank is not optimistic that inflation by May will trend downward due to a range of factors.
“What we as the CBN will continue to do is reduce the margin gap between the policy rate and inflation because it is currently wide which is negative in real rate terms. This negative real rate can bring disincentive to investments and everything has to be done to rein in inflation.
Going forward, we will do it moderately to avoid the contagion and instability effect in the financial system”, he said.
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