The Senate Committee on Banking, Insurance and other Financial Institutions on Monday directed the Central Bank of Nigeria to suspend the introduction of N5, 000 notes until the Senate was properly briefed.
The Chairman of the committee, Senator Bassey Otu (PDP- Cross River) issued the directive while speaking to journalists in Abuja.Mr Otu said that the re-denomination of the currency required the approval of the National Assembly, warning that the CBN must avoid sending the wrong signals to stakeholders in the economy.
He said it was vital for the CBN to discuss the implications of the currency re-denomination with the Senate before it was implemented.
“I believe that a project of this nature requires parliamentary approval because there are numerous fiscal implications on the entire economy.
“The CBN must be very careful in order not to send the wrong signal to the domestic sector and external partners that the Nigerian currency is valueless.
“So, we are sending a letter to them (CBN) to stop all further actions on this until the Senate of the Federal Republic is properly briefed,” he said.
He warned that the conversion of some denominations into coins would lead to a waste of public funds as the previous exercise did not yield the desired result.
“In 2005, the CBN undertook a major currency restructuring to re-coin some denominations which ran into billions of Naira.
“It did not work at all because both the goldsmiths and the blacksmiths converted the coins to moulding bangles, earrings and so on,” he added.
The committee chairman said there were other mechanisms available to the apex bank to tackle the problem of inflation other than the re-nomination of the nation’s currency.