The New N5000 note
NaijaRock
Home | Business | ( 1 ) | Subscribe
Posted by Felix Okoli on Wednesday August 29, 2012 6:15:3:
Plans are in the works for the introduction of a higher currency note in Nigeria - The highest ever and this one would be for a N5000 note. The highest we currently have is N1000.A lot of people have been expressing their concerns about it and here is what I've heard people saying:- It would cause inflation
- It would make life harder for the masses
- It would increase crime
- It would encourage the holding of cash at homeMost of the popular opinion by people are in the negative and this probably has to do with the fact that since the 1980s whenever there has been an introduction of higher currencies, it has always led to inflation in prices of goods.For experts like Sanusi, the reason for introducing the higher currency, even at a time when the naira is losing value, is probably to reduce the cost of printing naira notes. However, we know that this advantage would somehow be erased by the demerits it would also bring as it would encourage more people to hold onto cash rather than banking it. Think of it, CBN has a goal to reduce the amount of cash in the hands of people but by introducing higher denominations, it would rather encourage people to avoid banks since carrying something like a bundle of N5000 notes would amount to holding N500,000 and two bundles of such money would be N1m. So why would people want to bank their money at low pitiless interest rates when they can easily carry it? Besides, what it the essence of introducing higher currencies when they should have rather redenominated the naira so as to allow for a strong naira?Why does every CBN governor want to print new naira notes everytime they step into office? the CBN governor has done a lot of work since he entered office but this issue of bringing higher denominations is way too ambitious and would only incur the wrath of the masses who are already struggling to survive the inflation brought about by Jonathan's removal of fuel subsidy.
Comments:
Plans are in the works for the introduction of a higher currency note in Nigeria - The highest ever and this one would be for a N5000 note. The highest we currently have is N1000.A lot of people have been expressing their concerns about it and here is what I've heard people saying:- It would cause inflation
- It would make life harder for the masses
- It would increase crime
- It would encourage the holding of cash at homeMost of the popular opinion by people are in the negative and this probably has to do with the fact that since the 1980s whenever there has been an introduction of higher currencies, it has always led to inflation in prices of goods.For experts like Sanusi, the reason for introducing the higher currency, even at a time when the naira is losing value, is probably to reduce the cost of printing naira notes. However, we know that this advantage would somehow be erased by the demerits it would also bring as it would encourage more people to hold onto cash rather than banking it. Think of it, CBN has a goal to reduce the amount of cash in the hands of people but by introducing higher denominations, it would rather encourage people to avoid banks since carrying something like a bundle of N5000 notes would amount to holding N500,000 and two bundles of such money would be N1m. So why would people want to bank their money at low pitiless interest rates when they can easily carry it? Besides, what it the essence of introducing higher currencies when they should have rather redenominated the naira so as to allow for a strong naira?Why does every CBN governor want to print new naira notes everytime they step into office? the CBN governor has done a lot of work since he entered office but this issue of bringing higher denominations is way too ambitious and would only incur the wrath of the masses who are already struggling to survive the inflation brought about by Jonathan's removal of fuel subsidy.
Comments: