Poor implementation of the naira redesign policy is responsible for the prevailing cash scarcity, Central Bank of Nigeria (CBN) Governor Yemi Cardoso, said yesterday.
Cardoso acknowledged the “glaring defects” in various CBN policies and announced a comprehensive review initiative.
“We are taking a thorough look at all our policies implemented over time. This review aims to produce an elegant document outlining clear rules and procedures for navigating the Nigerian money market”, Cardoso told the audience at the launch of the World Bank Nigeria Development Update in Abuja.
Addressing the cash crunch plaguing Nigerians, Cardoso identified the poorly executed naira redesign as the primary culprit.
The apex bank boss said: “The apprehension surrounding the policy’s end date, well before the third quarter, triggered widespread hoarding. Many feared the old notes would lose legal tender status, prompting them to hold onto their cash.”
Offering a glimmer of hope, the CBN governor said the Supreme Court’s recent ruling, upholding the validity of the old notes beyond the initial deadline, will alleviate apprehensions and incentivize individuals to release their hoarded cash into circulation.
On the current naira scarcity, Cardoso said: “Unfortunately, the history of that lies with the naira redesign policy and coming to the end of the year, way before the third quarter, there was a lot of apprehension with respect to where this was all going to end; and whether the old currency would no longer be good for legal tender and many started hoardings. This is really what happened. Happily, Supreme Court has decided that the currency will be valid post-end of the year.”