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Currency Restructuring Exercise in Nigeria: overview and Potential Implications

Author

Listed:
  • Ernest Simeon Odior Ph.D

    (Department of Economics, Faculty of Social Sciences,University of Lagos, Akoka Lagos, Nigeria)

  • AFOLASHADE ABIBAT SHODEINDE

    (Department of Economics, Faculty of Social Sciences,University of Lagos, Akoka Lagos, Nigeria)

Abstract

This paper seeks to examine the potential policy implications of the new currency restructuring exercise (CURE) on the Nigerian economy. The specific objective of this study is to review the composition, rationale and proposed benefits of currency restructuring policy of CBN. The study overviewed the key rationale of the new Project CURE, which was designed to reduce cost of printing small currency notes, to minimize dollarization of the Nigerian economy and impacted on the exchange rate policy of CBN that has not been effective particularly between 1998 and 2011. The findings of the study show that the key potential policy implications of the new currency restructuring exercise are to raise Currency in Circulation, Money Supply and consequently inflation rate. It also has the potential of creating foreign currency liquidity risk. The study recommends that there should be greater focus on stabilization of Naira and there should be harmonization of fiscal and monetary policies. The study concludes on a final note that there are more pressing issues to be addressed currently in Nigeria.

Suggested Citation

  • Ernest Simeon Odior Ph.D & AFOLASHADE ABIBAT SHODEINDE, 2013. "Currency Restructuring Exercise in Nigeria: overview and Potential Implications," International Journal of Business and Social Research, LAR Center Press, vol. 3(6), pages 8-16, June.
    • Handle: RePEc:lrc:larijb:v:3:y:2013:i:6:p:8-16
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    References listed on IDEAS

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    1. Ignacio Mas, 1995. "Things Governments Do to Money: A Recent History of Currency Reform Schemes and Scams," Kyklos, Wiley Blackwell, vol. 48(4), pages 483-512, November.
    2. Axel Leijonhufvud, 2000. "Macroeconomic Instability and Coordination," Books, Edward Elgar Publishing, number 750.
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    Cited by:

    1. Erwin Bramana Karnadi & Putu Rusta Adijaya, 2017. "Redenomination: Why is It Effective in One Country but Not in Another?," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 186-195.

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