Governor of Central Bank of Nigeria (CBN), Olayemi Cardoso, has attributed the apparent scarcity of N100 and N200 notes to the increasing adoption of digital payment channels and the declining purchasing power of the lower-denomination notes.
Speaking on Tuesday after the Monetary Policy Committee (MPC) meeting in Abuja, Cardoso dismissed concerns that the affected notes had been withdrawn from circulation, noting that they remain legal tender and should continue to be accepted for transactions across the country.
Cardoso said the bank had not announced the withdrawal of any naira denomination and urged Nigerians not to reject the lower-value notes.
The CBN governor said the situation of the reduced circulation of N100 and N200 notes reflects the changing demand patterns within the financial system rather than any deliberate policy to phase them out.
According to him, the expansion of financial inclusion and the widespread use of electronic payment platforms have reduced reliance on physical cash, particularly lower denominations.
The CBN governor also noted that the depreciation of the naira has eroded the purchasing power of the smaller notes, making them less useful for day-to-day transactions.
He recalled that Nigeria had recorded 11 consecutive months of declining inflation before external factors disrupted the disinflation trend.
Reacting to the International Monetary Fund’s (IMF) recent assessment that the naira is undervalued, with an estimated fair value of about N1,150 to the US dollar, Cardoso maintained that the exchange rate should be determined by market forces rather than administrative targets.
He said the central bank would continue to support a transparent and market-driven foreign exchange regime anchored on a willing-buyer, willing-seller framework.
Cardoso added that the apex bank is satisfied with recent developments in the foreign exchange market, noting that improved liquidity and stronger investor confidence have enhanced market performance.
According to him, Nigeria now operates a functional, transparent and open foreign exchange market, with daily turnover exceeding $1 billion on some trading days.
