Money does not last forever. The average £5 pound note lasts about a year. A friend who should know told me the N20 note lasts 3 months… I don’t quite believe him. Naira notes however don’t last forever. Every now and then they need to be replaced.
Once notes are certified as damaged they are taken to ‘the Mint’ where they are destroyed. New currency totalling the same amount is printed to replace the destroyed currency. This is a constant process. Not necessarily done everyday but done regularly.
Where does the introduction of a new currency come in? Well this just means that anytime old currency is destroyed, the old type of bills are not be printed. Instead the new type of bills take their place. In essence the amount of money circulation is the same as before, just with different notes.
Say, for example, N10bn worth of N100 notes are scheduled to be destroyed. The Mint could choose to print N10bn worth of N5000 notes to replace it. The key point is that it still has to be N10bn worth. Could be coins, notes, whatever. The amount of money in circulation does not change.
Except in cases where the CBN orders everyone to exchange their old notes for new ones, which they have NOT done this time, this process takes a while and most people will not see the new currency for a while.
The moral of the story is the introduction of new bills doesn’t change the amount of money in circulation. The CBN isn’t going to dash anybody notes. New notes are only printed to replace old notes. ( or for other liquidity management reasons) There will just be an extra new kind of note to exchange your other notes for or to do business with.