Nigeria’s Buhari backs central financial institution on new banknotes By Reuters

ABUJA (Reuters) – Nigerian President Muhammadu Buhari on Sunday mentioned he backed the central financial institution’s resolution to attempt to mop up extra liquidity by recalling high-value financial institution notes and changing them with newly-designed ones from mid-December.

Central financial institution governor Godwin Emefiele mentioned final week that of three.3 trillion naira ($7.54 billion) money in circulation, 2.7 trillion was held exterior the banking sector, which undermined the financial institution’s financial coverage.

Essentially the most frequently-used notes are 200, 500 and 1,000 naira, that are to get replaced by Jan. 31, although officers haven’t made clear precisely how the plan will work.

“Individuals with illicit cash buried below the soil may have a problem with this, however staff, companies with legit incomes will face no difficulties in any respect,” Buhari informed an interview with a neighborhood TV channel.

Some financial analysts say the transition interval to the brand new notes is just too brief and will improve demand for {dollars} as a safer forex, which might put extra strain on the change price.

The finance minister was quoted by native media as saying she had not been consulted and feared there might be “critical penalties” for the naira.

Inflation in Nigeria rose for the eighth straight month to twenty.77% in September from 20.52% in August regardless of the central financial institution’s sharp price hikes to attempt to tame worth will increase.

Analysts say inflation is pushed by extra liquidity, greenback shortage and the excessive price of diesel.

($1 = 437.50)