CBN Governor Explains Why N100, N200 Notes Are Scarce Nationwide
- CBN Governor Olayemi Cardoso spoke after the MPC meeting in Abuja on Tuesday about the scarcity of lower-denomination notes
- Cardoso linked the declining circulation of N100 and N200 notes to rising digital payments and weakening purchasing power
- The CBN governor also addressed the IMF's assessment that the naira is undervalued and reaffirmed the bank's single-digit inflation target
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Central Bank of Nigeria (CBN) Governor Olayemi Cardoso has said the growing scarcity of N100 and N200 notes is the result of more Nigerians switching to digital payments and the declining everyday usefulness of low-value currency.
Cardoso made the remarks after the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, where he also reassured Nigerians that neither denomination has been removed from circulation.
Source: Facebook
He said:
"Yes, they remain legal tender. Unless the central bank states otherwise, Nigerians should assume that all existing denominations remain legal tender."
Why Lower-Denomination Notes Are Disappearing
The CBN governor said the country's financial system is shifting away from cash, particularly small notes, as electronic transactions become more common in daily life.
Cardoso said:
"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."
He also pointed to inflation as a contributing factor, noting that the purchasing power of smaller notes has dropped significantly, making them less practical for most transactions, Leadership reports.
He added:
"Of course, we must also acknowledge that currency devaluation has affected the purchasing power of lower-value notes. That is a reality. More importantly, however, as financial inclusion expands and digital payments become part of everyday life, fewer people will rely on these denominations."
CBN's Stance on Inflation and the Naira
On inflation, Cardoso said the CBN recorded 11 consecutive months of disinflation before external pressures slowed progress. He said the bank had been on course to achieve single-digit inflation by early 2027 before unexpected global developments intervened, but maintained that the target has not changed.
he said:
"It is important to remember where we are coming from. We recorded 11 consecutive months of disinflation and, from every indication, we expected that by early 2027 we would be where we wanted to be in terms of inflation, with a path towards single-digit inflation."
Source: Twitter
Responding to the International Monetary Fund's recent assessment that the naira is undervalued at around N1,150 to the dollar, Cardoso said the exchange rate should be driven by market forces rather than fixed benchmarks, the Cable reports.
He said the CBN would continue supporting a foreign exchange market where transactions are based on willing buyers and sellers.
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Supreme Court says old naira notes remain valid
Earlier, Legit.ng reported that the Supreme Court has nullified the ban on using the old N200, N500 and N1000 banknotes as legal tenders.
As reported by Vanguard newspaper, the apex court gave this ruling in a unanimous decision by a seven-member panel of justices.
The panel, in its ruling, held that the old banknotes should remain legal tender.
Source: Legit.ng
