The Central Bank of Nigeria (CBN) has reassured citizens that the limited availability of lower-denomination naira notes does not indicate their removal from circulation, linking this trend to the increasing preference for digital payments.
During a statement following the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, CBN Governor Olayemi Cardoso confirmed that N100 and N200 notes are still legal tender and should be accepted throughout the country.
“Yes, they remain legal tender. Until the central bank indicates otherwise, Nigerians can consider all existing denominations as valid currency,” Cardoso stated.
He explained that the decrease in circulation of lower-value notes stems from a shift in demand due to more Nigerians opting for cashless transaction methods. “As more individuals utilize digital payment options, the need for coins and lower-denomination notes diminishes. Less demand results in a reduced need for large-scale printing and distribution,” he added.
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Cardoso also mentioned that issues like inflation and the declining purchasing power of smaller denominations have made them less significant in everyday transactions. “We must recognize that the devaluation of currency has impacted the purchasing power of lower-value notes. That is a fact,” he noted.
Regarding inflation, the CBN governor reiterated the bank’s goal of attaining a single-digit inflation rate despite unforeseen global economic challenges. “We’ve seen 11 consecutive months of disinflation. Sadly, we’ve faced unexpected external shocks. Nevertheless, we remain committed to our single-digit inflation target,” he expressed.
In response to the International Monetary Fund’s (IMF) assessment suggesting that the naira is undervalued, Cardoso argued that the exchange rate should be determined by market dynamics. “We will continue to ensure that Nigeria has a foreign exchange market that is transparent, liquid, and operates on a willing-buyer, willing seller basis.”
