Some Nigerian Banks are only accepting deposits (money)from customers, but not dispensing or paying out the new banknotes!
Some commodities sellers have stopped the collection of old banknotes, rather they prefer cash transfers for commodities sold.
This situation presently taking place in the evolution and existence of our nation will definitely cause dislocation in our economy in the short run until the new banknotes go fully into circulation next week.
Some POS operators are not even paying out cash at the moment, this is absolute because some POS operators don’t even have the new banknotes at their disposal whilst some are hoarding the few new banknotes until next week when they will start paying out the new banknotes at higher charges now.
I have earlier commented that the CBN should permit the remaining printed old banknotes and the newly printed banknotes to be in circulation simultaneously.
More new banknotes should be printed to ensure sufficient availability for the high demand for the new banknotes but note that too much of money in circulation will absolutely cause inflation (that is an increase in the prices of goods and services).
In the study of Economics, too much of money in circulation is one of the causes and reasons for inflation (increase in the prices of goods and services).
With the new banknotes coming into full circulation beginning next week, the prices of goods and services will still be on the increase because the price of raw materials needed for production is on the increase, the cost of production is absolutely on the increase, import duty/taxes/tariffs are on the increase, lending interest rates is on the increase, there is absolutely high demand for goods and services, price of petroleum products is on the increase, and transportation fare is on the increase.
The Nigerian Economy is centered majorly on the revenue earned from the sale of petroleum products.
The fixing of petroleum products prices is dependent on lots of factors such as the cost of refining crude oil, the cost of the landing of refined petroleum products and high import duties or taxes, and OPEC Oil quotas for producing countries.
Inflation is a global trend!
But some countries have been able to manage or reduce inflation to an extent of a single digit whilst it is still double digits/figures in some countries.
The truth about the matter is absolute that inflation is absolutely a global trend ravaging the economies of nations.
Inflation can only reduce if the prices of petroleum, raw materials for production, and cost of production is reduced, and massive production of goods and services takes place.
It is possible, the demand for goods and services should equate corresponding supply of goods and services.
CBN must ensure that there are not too much of newly printed banknotes in circulation with a view to controlling inflation.
The CBN should also adopt the appropriate currency exchange rates regime suitable for the Nigerian Economy whether flexible, adjustable, fixed, or pegged exchange rates regime depending on the state of the Nigerian Economy.
Mr. Okoro Simeon is both an educationist and an economist. He is a commentator on national affairs. He is also a published author.