*If government can stop the printing 500 NGN notes and 1,000 NGN notes and officially discontinue its use!
*Reintroduction of Nigeria coins, 50Kobo, 1 NGN and 2 NGN.
Welcome, lets get started by examinining the top 10 performing currencies in the world to gain necessary insights before drawing our conclusions.
*.Kuwait Dinar KWD: ( 1 KWD = 1201.9611 NGN )
Bank notes: 1/4, 1/2, 1, 5, 10, 20 Dinars
Coins: 5, 10, 20, 50, 100, 200 Fils
*.Bahraini Dinar BHD: ( 1 BHD = 956.3254 NGN )
Bank note: BD 1/2, BD 1, BD 5, BD 10, BD 20
Coins: 5, 10, 25, 50, 100 Fils, BD 1/2
*.Omani Rial OMR: ( 1 OMR = 936.2906 NGN )
Bank note: 1/2, 1, 5, 10, 20, 50 Rials
Coin: 50, 10, 20, 50, 100 baisa and rarely used 200 biasa
*.Jordanian Dinar JDD: ( 1 JDD = 507,65070 NGN )
Bank notes: 1, 5, 10, 20, 50, Dinars
Coins: 1/2, 1, quirsh, 21/2, 5, 10 Piastras
*.British Pound GBP: ( 1 GBP = 504.8154 NGN )
Bank notes: €5, €10, €20, €50
Coins: 1P, 2P, 5P, 10P, 50P, €1, €2
*.Caymanian Dollar KYD: ( 1 KYD = 432.7622 NGN )
Bank notes: 1, 5, 10, 25, 50, 100 Dollars
Coin: 1, 5, 10, 25 Cents
*.Euro EUR: ( 1 EUR = 448.2926 NGN )
Bank notes: €5, €10, €20, €50, €100, €200 and €500
*.Swiss Franc CHF: ( 1 CHF = 388.1395 NGN )
Bank note: 10, 20, 50, 100, 200, 1000 francs
Coins: 5, 10 and 20 Rp/cts, 1/2, 1, 2 and 5 Fracs
*.United State Dollar USD: ( 1 USD = 360.5000 NGN )
Bank note: $1, $2, $5, $10, $20, $50, $100
Coins: 1C, 5C, 10C, $1/4, $1/2, $1.
Go back to the list once again and check what’s the highest denominations of each currency (and population of users of each currency), You will discover that the top performing currency do not have high face value like we have 500 NGN and 1,000 NGN in Nigeria.
Also, you will notice that the top performing currencies have coins form of currency with denomination of very low face value.
The highest of the denominaton is 1000 Franc followed by 500 EUR. 1000 Franc is not in frequent use and the highest Franc denomination next to it is 200 Frank ( not like 500 NGN as we have here in nigeria ). Also the use of 500 EUR will discontinue this year 2018.
Get a hold on history of exchange rate in Nigerian, you will find out that every introduction of new high denomination currency note has averse advese effect on it.
Why High Denominational Currency Note Is Bad:
1. Increase in prints of currency notes with high face value e.g 1000 NGN makes other lower currency of less important and less usefull. This can gradually lead to upgrade of price of goods and services in market.
2. It makes stealing and loothing of cash easier as larger amount of money value can be packed into a very small space.
Why do CBN currently print more high denominational currency alone? Methink its in a bid to enhance hoarding of cash against the comming 2019 general election.
3. 500 NGN and 1000 NGN are no money for the common man, go to the market and examine what denomination are most in use.
4. It’s in a way opposing the cashless policy by the federal government of Nigeria.
What The Wise Nations Did:
1. United State of Ameria used to have $500, $1000, $2000 currency notes until December 14, 1945, when the high denominational bills were last printed and officially discontinued on July 14, 1969 by the Federal Reserve System.
2. Europian Central Bank announced on 4 May, 2016 that it would phase out the 500 Euro notes by the end of 2018.
Other Factors That May Affect The Exchange Rate Of A Currency Include:
1. Ratio of goods/services importation to exportation
2. Availability of currency and number of complying users.
The Illegal illegal printing of currency by the CBN according to as reported by some news media outlets has a long way to desctroy value on our cash.
3. Inflation rate
4. Government debts and federal reserve.
5. Political policies and stability
6. And many more
My Recomendations:
Nigerian government should permanently discontinue and remove 500 NGN and 1,000 NGN currency notes from circulation. Reintroduction of 50 Kobo, 1 NGN and 2 NGN coins should also be done.
A serious government fighting corruption will yield to my advice as abundance of lower denomination currency will discourage looters from hoading and keeping cash in a safe instead of bank.
Caveat emptor:
This writeup is a personal opinion resulting from my many observations.
Source : Nairaland
