xandy84:
Did you read the report by Bloomberg that Naira is the worst performing currency globally as at yesterday? Production of goods and services strengthen value of a currency and not changing the design or color of it. $$ is the most hoarded currency in the world cos every corner of the planet has it stockpile and the it's still increasing in value.

Peterobi90:
It actually would reduce inflation and strengthen the naira..

If you have over N2tr unaccounted for in the economy, redesign would force that out either into the commerce/economy or making the banks liquid..

The scramble for the new designed naira for restock both for ongoing campaigns and re-oiling the nation would see a less demand for dollar which reduces the rates.. so in essence, there is likely to be an imminent crash on the greenback sometimes between December and January..

It was a good move...

Sultannayef:


Not too soon, not by Dec and January. It will take a while, more than six months.

Rilwayne001:
@SEUN Osewa, I see you have been going all about twitter trying really hard to play down the possible positive effect that we can eventually gained from the naira redesign.

But here is another PoV as I await your reply:

1). So many Nigerians have stacked Naira notes in their closets and are cut up with this policy of the CBN. There is a rush by ignorant Nigerians to convert their Naira to Dollars. Naira is at all time low against dollar and it's going to go even lower. For example a man converts #10m to 12,500 USD at the current exchange rate. It's easier to keep it with himself than to deposit in a Domiciliary account with a DMB because of the stringent policies around FX cash deposits. He hopes that by December when the new Nigeria is floated, he'd have his FX converted back to Naira from the Aboki guys he bought his USD from.

2)The Aboki man who sold FX to his customers at exorbitant rate excitedly goes to the DMB to deposit the millions of Naira he got the the FX swap he did. He knows he is getting richer in geometric proportion by this new policy by the CBN. He awaits the printing of the new Naira notes so as to reconvert the Naira he has in his account today USD and continue making more money.

3). All customers who deposited their Naira notes, those depositing and those who would be depositing are eagerly waiting for December 15. The DMBs are also waiting for the said date. Meanwhile there is a cashless policy waiting to hit all Nigerians by January 2023. On December 15th, customers would rush to the DMBs for new notes so as to withdraw as much as they can before January when the cashless policy would be effected 100%. The DMBS would rush to the central bank branches to withdraw new notes. The branches would go to the H/O for new notes. H/O would release just a little to branches based on cash management policies. CBN Branches would release in trinkets to DMB branches and tell them to go manage their customers. DMBs would revert back to their customers based on the low available new cash notes. There would be slight panicking as customers who deposited old naira notes cannot retrieve same notes from the DMBs anymore because of unavailability. Remember, digital money and paper money is still money and so customers would be advised to use electronic channels to make payments.

4) The Aboki guy who kept millions of Naira is also a victim of the shortage of new notes and so he cannot buy back FX from his customers who were hoping to return the ones the got earlier ones the new notes are in place. Aboki begins to panick as well. Those who have FX and need naira notes begin to sell their FX to people who have naira whether old or new just to cash in before January. In doing so, USD begins to crash as rapidly as it rose. Much of the FX becomes deposited in DMBs as carrying the raw cash isn't useful anymore. The CBN is happy because there is more FX in the banking system to give for Forms A, M and Q. Naira begins to gain rapidly against the dollar.

5). In January, cashless policy takes effect. So even if the CBN makes available more new notes to DMBs, customers cannot withdraw above the stipulated across-the-counter limit to avoid heavy charges. Customers are forced to use electronic payments, FX policy and transfer and withdrawal is so stiff that swapping FX and Naira is no more a gain. USD parallel and black market prices crash all the way down to CBN rate. Inflation based on importation of goods and services is checked as Naira becomes strong against dollar. People who have physical dollars would lose. There would be limited access to naira notes as electronic transfers become prevalent. Enaira purchases also become more as Nigerians look for most seamless methods to do payments. By June, whoever takes over power would have a soft landing as this policy by the CBN has controlled a whole lot of inflation, corruption and economic degradation.

6). If you have Naira notes stashed with you, return them back to the bank through your account. Don't try to play smart trying to beat the system, you may become the architect of your own loss. Your 12,500 USD may fall from #10,000,000 to #5,000,000 in June, 2023. Meanwhile if you put same #10,000,000 in Treasury Bills at the current 14.5%, you should be gaining about #725,000 at the same period.

Let's try and look at the bright side of things, Nigeria shall be great by God's grace

Rilwayne001:
@SEUN Osewa, I see you have been going all about twitter trying really hard to play down the possible positive effect that we can eventually gained from the naira redesign.

But here is another PoV as I await your reply:

1). So many Nigerians have stacked Naira notes in their closets and are cut up with this policy of the CBN. There is a rush by ignorant Nigerians to convert their Naira to Dollars. Naira is at all time low against dollar and it's going to go even lower. For example a man converts #10m to 12,500 USD at the current exchange rate. It's easier to keep it with himself than to deposit in a Domiciliary account with a DMB because of the stringent policies around FX cash deposits. He hopes that by December when the new Nigeria is floated, he'd have his FX converted back to Naira from the Aboki guys he bought his USD from.

2)The Aboki man who sold FX to his customers at exorbitant rate excitedly goes to the DMB to deposit the millions of Naira he got the the FX swap he did. He knows he is getting richer in geometric proportion by this new policy by the CBN. He awaits the printing of the new Naira notes so as to reconvert the Naira he has in his account today USD and continue making more money.

3). All customers who deposited their Naira notes, those depositing and those who would be depositing are eagerly waiting for December 15. The DMBs are also waiting for the said date. Meanwhile there is a cashless policy waiting to hit all Nigerians by January 2023. On December 15th, customers would rush to the DMBs for new notes so as to withdraw as much as they can before January when the cashless policy would be effected 100%. The DMBS would rush to the central bank branches to withdraw new notes. The branches would go to the H/O for new notes. H/O would release just a little to branches based on cash management policies. CBN Branches would release in trinkets to DMB branches and tell them to go manage their customers. DMBs would revert back to their customers based on the low available new cash notes. There would be slight panicking as customers who deposited old naira notes cannot retrieve same notes from the DMBs anymore because of unavailability. Remember, digital money and paper money is still money and so customers would be advised to use electronic channels to make payments.

4) The Aboki guy who kept millions of Naira is also a victim of the shortage of new notes and so he cannot buy back FX from his customers who were hoping to return the ones the got earlier ones the new notes are in place. Aboki begins to panick as well. Those who have FX and need naira notes begin to sell their FX to people who have naira whether old or new just to cash in before January. In doing so, USD begins to crash as rapidly as it rose. Much of the FX becomes deposited in DMBs as carrying the raw cash isn't useful anymore. The CBN is happy because there is more FX in the banking system to give for Forms A, M and Q. Naira begins to gain rapidly against the dollar.

5). In January, cashless policy takes effect. So even if the CBN makes available more new notes to DMBs, customers cannot withdraw above the stipulated across-the-counter limit to avoid heavy charges. Customers are forced to use electronic payments, FX policy and transfer and withdrawal is so stiff that swapping FX and Naira is no more a gain. USD parallel and black market prices crash all the way down to CBN rate. Inflation based on importation of goods and services is checked as Naira becomes strong against dollar. People who have physical dollars would lose. There would be limited access to naira notes as electronic transfers become prevalent. Enaira purchases also become more as Nigerians look for most seamless methods to do payments. By June, whoever takes over power would have a soft landing as this policy by the CBN has controlled a whole lot of inflation, corruption and economic degradation.

6). If you have Naira notes stashed with you, return them back to the bank through your account. Don't try to play smart trying to beat the system, you may become the architect of your own loss. Your 12,500 USD may fall from #10,000,000 to #5,000,000 in June, 2023. Meanwhile if you put same #10,000,000 in Treasury Bills at the current 14.5%, you should be gaining about #725,000 at the same period.

Let's try and look at the bright side of things, Nigeria shall be great by God's grace

Holuwaxheun:


There are several other things that causes inflation. Proper reduction of money in circulation should have been done by the government by embracing surplus budget (cutting their salaries to what the Nigeria IGR can cover), and also inproving domestic production on a large scale. But here we are, government embracing deficit budget and indulging in high loans from other countries.

Among many other, below are the causes of inflation

1. Cost-push inflation is the decrease in the aggregate supply of goods and services while

2. Demand-pull inflation is the increase in aggregate demand.

3. Built-in inflation is linked to adaptive expectations or the belief that present inflation rates will persist in the future.

4. Deficit spending by govt - In order to meet its mounting expenses, the government resorts to deficit financing by borrowing from the public and even by printing more notes


As it stand, FDC is quite right to a measure, redesigning of note will hardly solve the inflation problem if other measures that can assist in reducing inflation are not embraced - Govt should reduce its spending, domestic production on large scale should be encouraged, reduction in taxes to avoid cost push inflation, improvement on large production of our mineral resources (crude oil, coal, gold etc) to increase our Revenue reserve, Reduction in interest rate to encourage foreign investment, Improvement in securities of lives and properties to also encourage foreign investment and local production.

Until these are done, we are not yet ready to solve the issue of inflation. Do not be surprised, as it stands, Naira might hit N1,000 against the usd during this period.

May God help us all

Peterobi90:


Yes i read it, the Govt is trying to create an artifical demand for the naira, when there is an artificial demand with controlled physical disbursement, the dollar would be sold in blackmarkets(BDC) to purchase the naira because the new design would be in huge demand to re-oil the country alongside campaigns..

Rilwayne001:
@SEUN Osewa, I see you have been going all about twitter trying really hard to play down the possible positive effect that we can eventually gained from the naira redesign.


But here is another PoV as I await your reply:

1). So many Nigerians have stacked Naira notes in their closets and are cut up with this policy of the CBN. There is a rush by ignorant Nigerians to convert their Naira to Dollars. Naira is at all time low against dollar and it's going to go even lower. For example a man converts #10m to 12,500 USD at the current exchange rate. It's easier to keep it with himself than to deposit in a Domiciliary account with a DMB because of the stringent policies around FX cash deposits. He hopes that by December when the new Nigeria is floated, he'd have his FX converted back to Naira from the Aboki guys he bought his USD from.

2)The Aboki man who sold FX to his customers at exorbitant rate excitedly goes to the DMB to deposit the millions of Naira he got the the FX swap he did. He knows he is getting richer in geometric proportion by this new policy by the CBN. He awaits the printing of the new Naira notes so as to reconvert the Naira he has in his account today USD and continue making more money.

3). All customers who deposited their Naira notes, those depositing and those who would be depositing are eagerly waiting for December 15. The DMBs are also waiting for the said date. Meanwhile there is a cashless policy waiting to hit all Nigerians by January 2023. On December 15th, customers would rush to the DMBs for new notes so as to withdraw as much as they can before January when the cashless policy would be effected 100%. The DMBS would rush to the central bank branches to withdraw new notes. The branches would go to the H/O for new notes. H/O would release just a little to branches based on cash management policies. CBN Branches would release in trinkets to DMB branches and tell them to go manage their customers. DMBs would revert back to their customers based on the low available new cash notes. There would be slight panicking as customers who deposited old naira notes cannot retrieve same notes from the DMBs anymore because of unavailability. Remember, digital money and paper money is still money and so customers would be advised to use electronic channels to make payments.

4) The Aboki guy who kept millions of Naira is also a victim of the shortage of new notes and so he cannot buy back FX from his customers who were hoping to return the ones the got earlier ones the new notes are in place. Aboki begins to panick as well. Those who have FX and need naira notes begin to sell their FX to people who have naira whether old or new just to cash in before January. In doing so, USD begins to crash as rapidly as it rose. Much of the FX becomes deposited in DMBs as carrying the raw cash isn't useful anymore. The CBN is happy because there is more FX in the banking system to give for Forms A, M and Q. Naira begins to gain rapidly against the dollar.

5). In January, cashless policy takes effect. So even if the CBN makes available more new notes to DMBs, customers cannot withdraw above the stipulated across-the-counter limit to avoid heavy charges. Customers are forced to use electronic payments, FX policy and transfer and withdrawal is so stiff that swapping FX and Naira is no more a gain. USD parallel and black market prices crash all the way down to CBN rate. Inflation based on importation of goods and services is checked as Naira becomes strong against dollar. People who have physical dollars would lose. There would be limited access to naira notes as electronic transfers become prevalent. Enaira purchases also become more as Nigerians look for most seamless methods to do payments. By June, whoever takes over power would have a soft landing as this policy by the CBN has controlled a whole lot of inflation, corruption and economic degradation.

6). If you have Naira notes stashed with you, return them back to the bank through your account. Don't try to play smart trying to beat the system, you may become the architect of your own loss. Your 12,500 USD may fall from #10,000,000 to #5,000,000 in June, 2023. Meanwhile if you put same #10,000,000 in Treasury Bills at the current 14.5%, you should be gaining about #725,000 at the same period.

Let's try and look at the bright side of things, Nigeria shall be great by God's grace

Peterobi90:
It actually would reduce inflation and strengthen the naira..

If you have over N2tr unaccounted for in the economy, redesign would force that out either into the commerce/economy or making the banks liquid..

The scramble for the new designed naira for restock both for ongoing campaigns and re-oiling the nation would see a less demand for dollar which reduces the rates.. so in essence, there is likely to be an imminent crash on the greenback sometimes between December and January..

It was a good move...

Baffupdrizz:


My last statement in my response to you is my answer to your question.
Stashing up cash instead of reinvesting it in the economy is one of the contributing factors of hyper inflation because that same money if deployed for projects can drive economic growth, and depending on the type of investment, investing it can contribute in some measure to the growth of our nation's GDP.

Peterobi90:


The country would be scarce of the new design, while the old design is fast becoming obsolete with deadline, you are left with the option of payment into the banks without option of exchange or putting it into the economy through commerce. When the banks are liquid, there is less restrictions alongside inflation.

The BDC's would also be needing the naira because the tight checks on the new notes in such bulk distribution for campaigns and re-stock would force many to the BDC whom would sell their forex to serve their client demands...

Saintinoo:
What kind of write up is this, economics is not political science where you just make assumption and write base on what you see happening in the country.

What data did FDC use in carrying out this analysis, what model showed them that naira redesign will not reduce inflation, of course it will but only on a short term. The only problem is that it will have great effect on our economic growth.

Peterobi90:
It actually would reduce inflation and strengthen the naira..

If you have over N2tr unaccounted for in the economy, redesign would force that out either into the commerce/economy or making the banks liquid..

The scramble for the new designed naira for restock both for ongoing campaigns and re-oiling the nation would see a less demand for dollar which reduces the rates.. so in essence, there is likely to be an imminent crash on the greenback sometimes between December and January..

It was a good move...

Rilwayne001:
@SEUN Osewa, I see you have been going all about twitter trying really hard to play down the possible positive effect that we can eventually gained from the naira redesign.

But here is another PoV as I await your reply:

1). So many Nigerians have stacked Naira notes in their closets and are cut up with this policy of the CBN. There is a rush by ignorant Nigerians to convert their Naira to Dollars. Naira is at all time low against dollar and it's going to go even lower. For example a man converts #10m to 12,500 USD at the current exchange rate. It's easier to keep it with himself than to deposit in a Domiciliary account with a DMB because of the stringent policies around FX cash deposits. He hopes that by December when the new Nigeria is floated, he'd have his FX converted back to Naira from the Aboki guys he bought his USD from.

2)The Aboki man who sold FX to his customers at exorbitant rate excitedly goes to the DMB to deposit the millions of Naira he got the the FX swap he did. He knows he is getting richer in geometric proportion by this new policy by the CBN. He awaits the printing of the new Naira notes so as to reconvert the Naira he has in his account today USD and continue making more money.

3). All customers who deposited their Naira notes, those depositing and those who would be depositing are eagerly waiting for December 15. The DMBs are also waiting for the said date. Meanwhile there is a cashless policy waiting to hit all Nigerians by January 2023. On December 15th, customers would rush to the DMBs for new notes so as to withdraw as much as they can before January when the cashless policy would be effected 100%. The DMBS would rush to the central bank branches to withdraw new notes. The branches would go to the H/O for new notes. H/O would release just a little to branches based on cash management policies. CBN Branches would release in trinkets to DMB branches and tell them to go manage their customers. DMBs would revert back to their customers based on the low available new cash notes. There would be slight panicking as customers who deposited old naira notes cannot retrieve same notes from the DMBs anymore because of unavailability. Remember, digital money and paper money is still money and so customers would be advised to use electronic channels to make payments.

4) The Aboki guy who kept millions of Naira is also a victim of the shortage of new notes and so he cannot buy back FX from his customers who were hoping to return the ones the got earlier ones the new notes are in place. Aboki begins to panick as well. Those who have FX and need naira notes begin to sell their FX to people who have naira whether old or new just to cash in before January. In doing so, USD begins to crash as rapidly as it rose. Much of the FX becomes deposited in DMBs as carrying the raw cash isn't useful anymore. The CBN is happy because there is more FX in the banking system to give for Forms A, M and Q. Naira begins to gain rapidly against the dollar.

5). In January, cashless policy takes effect. So even if the CBN makes available more new notes to DMBs, customers cannot withdraw above the stipulated across-the-counter limit to avoid heavy charges. Customers are forced to use electronic payments, FX policy and transfer and withdrawal is so stiff that swapping FX and Naira is no more a gain. USD parallel and black market prices crash all the way down to CBN rate. Inflation based on importation of goods and services is checked as Naira becomes strong against dollar. People who have physical dollars would lose. There would be limited access to naira notes as electronic transfers become prevalent. Enaira purchases also become more as Nigerians look for most seamless methods to do payments. By June, whoever takes over power would have a soft landing as this policy by the CBN has controlled a whole lot of inflation, corruption and economic degradation.

6). If you have Naira notes stashed with you, return them back to the bank through your account. Don't try to play smart trying to beat the system, you may become the architect of your own loss. Your 12,500 USD may fall from #10,000,000 to #5,000,000 in June, 2023. Meanwhile if you put same #10,000,000 in Treasury Bills at the current 14.5%, you should be gaining about #725,000 at the same period.

Let's try and look at the bright side of things, Nigeria shall be great by God's grace

angelEmade:

I checked some of your points with Google and some financial analysis tools online. You are so so on point!
.
.
You are definitely a professional fin. Analyst More grease sir.

Peterobi90:
It actually would reduce inflation and strengthen the naira..

If you have over N2tr unaccounted for in the economy, redesign would force that out either into the commerce/economy or making the banks liquid..

The scramble for the new designed naira for restock both for ongoing campaigns and re-oiling the nation would see a less demand for dollar which reduces the rates.. so in essence, there is likely to be an imminent crash on the greenback sometimes between December and January..

It was a good move...

bizzibodi:
Dollar will only fall with naira gaining if USA will also withdraw their old currency from circulation to be replace by new bills.Aboki,looters will be begging you to buy dollar cheaply.

bizzibodi:
Dollar will only fall with naira gaining if USA will also withdraw their old currency from circulation to be replace by new bills.Aboki,looters will be begging you to buy dollar cheaply.

lexy2014:


Did anybody complain that they didn't have money to execute project? I didn't ask you about GDP. How is hoarding of naira notes "DEFINITELY ONE of the numerous interrelated but multifaceted reasons" responsible for inflation and the poor value of the naira?

You are stating the "what". My question is "HOW".

Baffupdrizz:


It seems you are bent on not seeing the 'how' that you have been asking of, even when it is being explained to you over and over again. Are you trying to insinuate otherwise? What is your point?