The Central Bank of Nigeria (CBN) has taken steps to ease the prolonged cash crunch that has made life difficult for millions of Nigerians and residents by releasing billions of naira to Deposit Money Banks (DMBs) over the past weekend.

The CBN has directed banks to open their branches over the weekend and dispense cash via Automated Teller Machines (ATMs) and over-the-counter to customers.

Many banks have complied with the CBN’s directive, as evidenced by the opening of several bank branches and the availability of cash to customers.

While some banks have sent emails to their customers, notifying them of the weekend operations, most branches of banks in Lagos, Abuja, Ogun, and other states have attended to customers both in the banking hall and via ATM.

Many customers have been able to withdraw up to N20,000 over-the-counter, while holders of other banks’ ATMs have been able to withdraw N5,000 only. Some bank branches have also loaded their ATMs with both old and new naira notes.

The move has been greeted with mixed reactions, with some Nigerians welcoming the development, while others have expressed concerns about the quality of the old naira notes dispensed. However, for most Nigerians, the kind of naira notes dispensed doesn’t matter as long as they can spend the cash.

Checks by Investors King show that ATMs of Zenith Bank, PremiumTrust Bank, GTB, Unity Bank and Access Bank branches at Redemption Camp along the Lagos-Ibadan Expressway were flooded with cash.

However, because of the compliance level, we observed that there were no long queues, even after the Sunday service attributed to rush as bank customers were allowed to walk in to perform their normal transactions. Also, both old and new naira notes were dispensed.

The Central Bank of Nigeria (CBN) led monetary policy committee has raised the nation’s borrowing cost by another 50 basis points following a 500 basis points increase in 2022 to 18%.

The committee attributed its decision to the rising inflation rate and the need to contain price development around expectations of subsidy removal and other energy sources.

“These in the view of members, provides a compelling argument for an upward adjustment of the policy rate, albeit, less aggressively. The Committee, however, noted that the naira redesign and cash withdrawal limit policies have resulted in a sizeable reduction in Currency-Outside-Banks, indicating an expected improvement in the potency of monetary policy tools,” the minutes stated.

Another factor considered was the drop in capital importation and the impact of exchange rate pressure on domestic price levels.

The committee, therefore, called for policies to attract both portfolio and foreign direct investment to Nigeria.

It maintained optimism that, the continued progress made with the RT200 FX programme, Naira-4-dollar and
other policies targeted at attracting diaspora remittances, would continue to help improve accretion to the external reserves and improve liquidity in the foreign exchange market.

Members, however, remained aware of the ongoing challenges associated with the limits imposed on cash withdrawals in the face of frequent downtime in bank electronic transaction channels. The Committee thus called on Other Depository Corporations, online payment platforms, and other stakeholders to ensure that the prevailing incidence of network failures is overcome in the immediate and short term.

This would ensure that the Naira Redesign and Cash Withdrawal Limit Policies lead to an improved in-road of the CBN Cashless program and efficiency of the transmission mechanism of monetary policy.

Members, therefore, agreed to raise Monetary Policy Rate by 50 basis points, with ten members voting to raise the MPR by 50 basis points while one member voted to raise the MPR by 25 basis points and one member voted to hold the MPR. All members voted to keep all other parameters constant.

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele has said that about N1 trillion is currently in circulation and more redesigned naira notes will be made available to the citizens.

This is as he apologised for the increase in failed digital bank transactions, promising that the online payment system hitches will be resolved soon.

The CBN governor spoke on Tuesday at the close of the two-day monetary policy committee meeting held in Abuja.

Investors King reports that Nigerians have been faced with cash scarcity since January, 2023 and recently, rise in failed electronic bank transactions done through bank mobile apps, debit cards and USSD channels making payment more difficult.

Emefiele assured that the CBN payments system management department are working on it to ensure that the situation is improved and electronic banking channels are resolved on time.

He commended the fintechs for complementing payment channels to reduce the workload on traditional banks in Nigeria.

His words, “I must apologise. Yes, online channels fail. But no doubt it is as a result of the deluge of online transactions that hit the banking industry. But it is being resolved,” Emefiele said.

“On a daily basis, our payments system management department monitors the online payment platforms so as to make sure that when there is a downtime, they are quickly resolved so that transactions can go on smoothly.”

According to the CBN Boss, the apex bank is working to ensure that more redesigned notes are circulated but are not kept outside the bank as the redesign policy aims to checkmate storing money in other places.

He gave the details of the redesigned naira notes pumped into circulation at the beginning of the policy as N3.23 trillion, of which only N500 billion was kept in bank accounts while N2.73 trillion was stored outside the banks.

“It was published yesterday that currency in circulation is close to N1 trillion. CBN will continue to pump the newly redesigned currency into the market.

“The truth is that at some point we will need to reassess to know whether the currency in circulation has attained an optimal level so as to put in place measures to ensure that we don’t go to the level where we were when people kept money outside the banking system for their own benefits,” he added.