The governor of the Central Bank of Nigeria (CBN), Sanusi
Lamido on Tuesday reacted to a statement credited to a former
President, Olusegun Obasanjo, who said that the planned introduction of
the N5000 note will increase inflation in the country.
However, speaking at the sixth annual conference of the Chartered
Institute of Bankers of Nigeria, Mr Sanusi said Mr Obasanjo had
introduced more high denomination in Nigeria than any other Head of
State.
“General Obasanjo did N20; he did N100, N200, N500 and N1000. He has
introduced more higher denomination than any Head of States,” Mr Sanusi
said.
The CBN governor said that during the period Mr Obasanjo was
introducing high denomination inflation in Nigeria was actually low.
“General Obasanjo did N100 in 1999; then he did N200 in 2000; he did
N500 I think two years later; and did N1000. In that period, inflation
was coming down because it was accompanied by very tight monetary and
fiscal policies during his reforms.
“For somebody who have gone through that to come and stand up and
say ‘introducing a higher denomination causes inflation’ I don’t know
if somebody wrote his speech. I’m trying to see him or if he was
misquoted.
“If he actually said that then he must be the single most important
determinant of inflation in our history given the number of notes that
he introduced,” he said
Mr Sanusi said printing higher denomination without increasing the
money supply in the economy will not increase inflation. “This is
simple economics,” he said.
culled from: channelstv
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