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Bullion

Keywords

Currency management, CBN, Nigeria.

Abstract

This paper seeks to highlight the issues in currency management, identify the challenges of currency management in Nigeria, and situate the currency management reforms of the Central Bank of Nigeria in proper context. The paper is structured into six sections. Following the introduction, the key dimensions of the currency management function is highlighted in section 2. Section 3 reviews the major currency episodes in Nigeria while section 4 examines the shortcomings of the existing currency arrangements. Nigeria's reform effort in currency management is discussed in Section 5 and the paper is concluded in section 6 by observing that: as inflation has substantially eroded the value of the existing range of coins, it is advisable to demonetise some of them; the present N5 note should be coined; to facilitate currency distribution, the CBN should establish branches in those States of the Federation where it is not yet represented. This would go a long way in minimizing the cost and risks involved in currency movements. Ultimately, this function should be privatized; Furthermore, as is the practice in the United Kingdom, there is need to explore the possibility of using a private company to distribute currency through the Automated Teller Machines (ATMs); and the CBN should also expedite action on withdrawing defaced and dirty Naira notes from circulation.

Author Bio

The author is a staff of Union Bank of Nigeria PLC.

Publication Title

CBN Bullion

Issue

4

Volume

30

COinS
 
 

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