Nigeria unveils redesigned high-denomination banknotes as the central bank confirmed a January deadline to roll out the new bills despite calls for an extension.
“We will not shift the deadline,” Governor Godwin Emefiele said at a briefing in the capital, Abuja. Critics of the move have argued that the six-week window will cause massive lines at banks and hurt the rural poor who live far from branches.
The bank said last month it plans to replace 200-, 500- and 1,000-naira notes starting mid-December in a bid to mop up excess cash, help control inflation and curb criminality.
It has given Nigerians until January 31 to exchange existing bills for new ones, a tight deadline considering that it estimates that as much as 2.7 trillion naira ($6.1 billion) sits outside bank vaults. Nigeria has an average of 4.5 bank branches per 100,000 people and 45% of adults don’t have a bank account.
The announcement came after the bank raised its benchmark interest rate to 16.5% from 15.5% to tame surging inflation.
The naira fell to record lows on the widely used black market after the announcement of the currency redesign on October 26, as residents with undeclared naira stashes rushed to buy the US dollar.
The local unit traded at 778 naira a dollar on the parallel market, according to Abubakar Mohammed, operator of a bureau de change that tracks the data in Lagos, Nigeria’s commercial capital. On the tightly controlled official market, it traded at 441.11 per dollar as of 4:35 p.m. local time.