Market pressures expect to ease as the Supreme Court on Friday ordered that old N200, N500, and N1,000 notes remain in circulation till December 31, 2023. The apex court also nullified the Federal Government’s naira redesign policy, declaring it as an affront to the 1999 Constitution.
Naira swaps that followed the redesign of the local currency brought unexpected pressures on people and businesses in the country in the past months, MarketForces Africa reported.
The scarcity of new naira notes in the economy triggered unrest that forced many deposit money banks to close operations across states, a development some think impacted 2023 presidential election conducted last week.
Justice Emmanuel Agim, who read the lead judgment, held that the preliminary objections by the defendants which include the Attorney General of the Federation, Bayelsa and Edo state government are dismissed as the court has the jurisdiction to entertain the suit.
“President acted Ulta vires by his glaring failure to consult with the National Council of States, Federal Executive Council FEC and the National Economic Council NEC before directing the Central Bank of Nigeria to unlawfully introduce new Naira notes”.
The naira programme by the Central Bank of Nigeria was implemented to reduce the amount of the local currency that is outside the banking system amidst a rising trend of terrorism financing, and foreign currency speculation among others.
Some economists still believe that the supreme court’s decision to interfere with the monetary policy will have negative effects on market perception in the short to long run noting that the CBN Act spells out its independence from others.