The Central Bank of Nigeria (CBN) has assured Nigerians that the scarcity of lower-denomination naira notes does not mean they have been withdrawn from circulation, attributing the development to the growing use of digital payment channels.
Speaking after Tuesday’s Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Olayemi Cardoso said the N100 and N200 notes remain legal tender and should continue to be accepted nationwide.
“Yes, they remain legal tender. Unless the central bank states otherwise, Nigerians should assume that all existing denominations remain legal tender,” Cardoso said.
He explained that the reduced circulation of lower-value notes is driven by changing demand as more Nigerians embrace cashless transactions.
“As more people adopt digital payment channels, the demand for coins and lower-denomination notes naturally declines. If there is less demand for them, there is less need to print and circulate them in large quantities.”
Cardoso also noted that inflation and the declining purchasing power of smaller denominations have reduced their relevance in daily transactions.
“Of course, we must also acknowledge that currency devaluation has affected the purchasing power of lower-value notes. That is a reality,” he said.
On inflation, the CBN governor reaffirmed the bank’s commitment to achieving single-digit inflation despite unexpected global economic shocks.
“We recorded 11 consecutive months of disinflation. Unfortunately, we have experienced external shocks that were not anticipated. As for our single-digit inflation target, we remain committed to it.”
Responding to the International Monetary Fund’s (IMF) assessment that the naira is undervalued, Cardoso maintained that the exchange rate should be determined by market forces.
“We will continue to ensure that Nigeria has a foreign exchange market that is transparent, liquid and based on a willing-buyer, willing-seller framework.”
