Nigeria’s central bank delayed a plan to remove high-value currency notes following an order by the nation’s Supreme Court, after severe disruptions in Africa’s biggest economy.
(Bloomberg) — Nigeria’s central bank delayed a plan to remove high-value currency notes following an order by the nation’s Supreme Court, after severe disruptions in Africa’s biggest economy.
The Central Bank of Nigeria began replacing old 200-, 500- and 1,000-naira notes with new ones in mid-December in a bid to mop up excess cash, rein in inflation and curb rising insecurity. The move led to cash shortages, stalled the nation’s estimated $220 billion informal economy and prompted some state governments to challenge the policy in court.
The Supreme Court in a ruling earlier this month scrapped the central bank’s Feb. 10 deadline to demonetize old notes and ordered that the bills remain in circulation along with new ones until the end of the year.
The central bank’s directive will bring about 2.1 trillion naira ($4.6 billion) of cash back into the system. That will be a relief for businesses in the largely cash-based economy. Meanwhile, residents thronged the nation’s banks including Standard Chartered Plc’s Nigerian unit in Lagos on Tuesday to access the old bills.
“I wish returning the old naira notes will bring this suffering to an end,” said Paul Ngutor, while waiting for his turn to enter a Standard Chartered bank branch in Lagos. “It’s been tough since February.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.