Senior staff of financial institutions warn that proposed currency restructuring and the issuance of N5000 note might devalue Nigeria’s currency.

By Premium Times (with agency reports)

The Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) on Wednesday opposed the proposed currency restructuring and the issuance of N5000 note by the Central Bank saying that the exercise might result in the devaluation of the country’s currency.

The association’s president, Sunday Salako, and the senior assistant secretary, Friday Inegbedion, said in Lagos, that the apex bank’s plan to introduce higher denomination of the Naira would attract hyper-inflation in the economy.

Since August 23, when the CBN announced its plans to restructure the naira and introduce the N5000 note effective January 2013, Nigerians from all sectors of the economy have risen in stout condemnation. They pointed out that the proposal was counter to the CBN’s cashless policy and might allow for money laundering.

The union observed that such an announcement often signified a regime of increased and sustained fiscal deficit financing in the economy.

“In spite of the introduction of local and international money transfers, people still carry huge sums of cash around and this will be aided by the higher denomination currencies,” the association said.

Rather than issue higher denomination of the country’s currency, ASSBIFI charged the CBN to initiate programmes that would tackle inflation, high interest rates, improper banking habits, bank robberies, unemployment, corruption, money laundering, insecurity and poverty.

It advised the government to use the proposed N40 billion to be spent for the naira restructuring to revive other comatose sectors of the economy.

The National Assembly has already asked the CBN governor, Lamido Sanusi, to suspend the idea and pay attention to other policies that will stem inflation and strengthen the economy.

The CBN however says it has legal backing for its actions and also the support of President Goodluck Jonathan. The bank said it was consulting with the lawmakers over the proposal.