Kingsley Moghalu, former CBN deputy governor, says while he supports the redesigning of some naira notes, he doubts it will curb inflation and increase in prices of food.

“I fully support the Central Bank’s redesign of the Naira,” Mr Moghalu said. “I doubt it will solve inflation because there also are other major reasons for inflation such as the forex crisis, which this new move could exacerbate, as well the impact of the security crisis on food price inflation.”

In a series of tweets on Friday, Mr Moghalu explained that the decision was proposed by the  CBN “to force all those notes back into the banking system. Those with the notes must surrender to get new ones or else it becomes illegal tender after January 31 2023.”

He, however, added that “the flip side is that people who are holding huge amounts of cash outside the banking system for nefarious reasons will go the parallel forex market to buy hard currency, putting further downward pressure on the value of the Naira as too much Naira will be chasing too few dollars.”

Earlier in the week, the apex bank gave Nigerians six weeks to return old naira notes, saying it has “obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels.”