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Mar 6, 2023
Nigerian Banks Dispense Old Naira Notes After Court Ruling
(Bloomberg) -- Nigerian commercial lenders are recirculating naira notes withdrawn under the central bank’s demonetization policy, after the nation’s Supreme Court ruled that they can remain legal tender until the end of the year.
Lenders including Guaranty Trust Holding Co. Plc and Sterling Bank Plc dispensed the old 500-naira and 1,000-naira to customers on Monday, according to spokespersons for the two banks.
“The central bank is abiding by the supreme court’s ruling, as are the banks,” Abubakar Suleiman, chief executive officer for Sterling Bank said by phone. “I don’t think we need a directive to obey the court,” he said, responding to a question whether the central bank has asked lenders to heed the court judgment.
This will likely ease the chaos that gripped Africa’s most populous nation after the country’s regulator pulled out 2.1 trillion naira cash from circulation and replaced only a fraction of the amount with new notes, disrupting transactions in Nigeria’s cash dominant economy.
Read: Lack of Cash Is Stalling Nigeria’s $220 Billion Informal Economy
The Supreme Court in Africa’s largest economy last week voided a Feb. 10 deadline to phase out higher denomination bank notes and ordered an extension to year-end in a ruling to a case brought by some state governments, challenging the authority of the central bank to implement the policy.
©2023 Bloomberg L.P.
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