Nigeria Supreme Court Orders Halt to Cash Replacement Policy

Nigeria’s top court ordered the central bank to halt its removal of old high-denomination banknotes from circulation, a move that’s created an acute cash shortage in Africa’s largest economy, Bloomberg News reported. The Supreme Court decided Friday that the Central Bank of Nigeria’s plan to discontinue the use of old bills by Feb. 10 was unconstitutional. The judges ruled that the notes should remain in circulation until the end of the year, Nasir El-Rufai, one of the state governors that brought the suit, told reporters afterwards. The yield on Nigeria’s 2032 dollar bonds fell 16 basis points to 12.47% earlier Friday and the notes retained their gains after the ruling was announced. The central bank’s project to replace 200, 500 and 1,000 naira notes that started on Dec. 15 has disrupted everyday life in Africa’s most populous nation, where only 60% of households have access to a bank account, because of a shortage of new bills. Snaking queues are now a common sight outside ATMs and bank branches, while common tasks such as riding the bus or buying food have become an ordeal. Private-sector activity last month contracted for the first time in almost three years as companies reduced output and cut jobs because of the scarcity. Read more.