Currency Redesign and Monetary Policy of Nigeria: An Evaluation

Abstract

The main goal of banknote redesign is to achieve certain goals, such as enhancing banknote security, preventing counterfeiting, protecting the nation's common legacy, managing the amount of money in circulation, and decreasing the total cost of currency management. This study examined the impact of currency redesign on monetary policy of Nigeria: an evaluation from 2015 to 2023. From the literatures reviewed, the redesigning of the Naira is for economic reasons which is not limited to reducing inflation, combating counterfeiting, checking financial insecurity and reducing the money in circulation. Other research argued that the policy rids the economy of a lot of ‘black money’, thereby helping it improve the health of the monetary system which enables the regulators to monitor the flow of funds in the country. In addition, studies contributed that currency redesign can minimize the influence of money on the country’s electoral process by discouraging vote-buying and inducing of electoral officers. This study recommends among others that the Central Bank of Nigeria (CBN) can limit cash flow to all Banks, by providing leadership and ensuring that the Naira is not commandeered in bullion vans for the prosecution of Elections vis-a-vis the Bimodal Voter Accreditation System (BVAS) at every polling booth monitored by INEC.