… Says interest rate won’t crash
Governor
of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi yesterday
said the apex bank would revisit the controversial currency notes
redesign to help tackle growing cases of fake currency notes in the country.
Sanusi who spoke when he appeared before the House of Representatives
Committee on Banking and Currency also ruled out the likelihood of
interest rate coming down.
Rather than banks reducing interest
rates, he said such rates would likely climb higher. Interest rate
currently stands at between 17 and 25 percent. He equally revealed that
Excess Crude Account went down by $7 billion dollars, stressing that the
Federal Government was taking money from the account to balance the
2013 budget.
The CBN boss said the hue and cry over the introduction
of N5000 notes and redesign of naira notes planned by CBN last year was
uncalled for, insisting that the country must revisit the redesign of
the notes, which, he said, had lasted between eight to 10 years if fake
currency notes in the system must be addressed.
According to him,
8.4 percent of notes in circulation were fake in every N1 million notes,
describing the situation as alarming. He said, “one of the reasons we
wanted to have a restructuring of the redesign of the currency a few
months ago was because many of our notes had been in existence for
upward of eight or even 10 years, but the best practice is that within a
period of five to eight years you redesign the currency after which
counterfeiters tend to catch up with.
“Even at that, Nigerian notes,
in terms of what we see as counterfeit and processing, the percentage
is very low. We had about 3.9 percent in 2007, 6 percent in 2008, 8.4
percent in 2009, 7.4 in 2010, 5.4 in 2011 and 8.4 percent in 2012 of the
notes processed were counterfeit.”
On the report that some
banks’ATMs were dispensing fake naira notes, Sanusi said, “with ATM
machines it should not happen because it has been processed and we would
be very pleased to know if there are specifics about any bank so that
we can draw their attention on the importance of processing them before
putting them in ATM machines.”
Sanusi noted that CBN’s plan to
redesign naira notes suffered because of all the noise around N5,000
note and therefore it was being delayed because that is what would have
made it impossible for counterfeiters to cook so they have to wait for
another five, six, seven years before they learn how to counterfeit, by
which point, the CBN should be redesigning the notes again.
“So I
suppose that at some point the country would have to revisit the issue
of redesigning the notes but at the moment, based on popular demands, we
had to step down the redesign.”
Source: Sun
