CBN Blames Digital Payments, Declining Purchasing Power for Scarcity of N100, N200 Notes

The Central Bank of Nigeria (CBN) has reassured Nigerians that lower-denomination naira notes, particularly the N100 and N200 bills, remain legal tender despite their apparent scarcity across the country.

Speaking after Tuesday’s Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Olayemi Cardoso said the reduced circulation of the notes is largely the result of changing payment habits and the growing adoption of digital financial services rather than any policy decision to withdraw them.

His comments come amid concerns from members of the public and traders who have reported increasing difficulty obtaining smaller denominations for daily transactions.

Cardoso stressed that the apex bank had not withdrawn any denomination from circulation and urged Nigerians to continue accepting all existing naira notes.

“Unless the Central Bank states otherwise, Nigerians should assume that all existing denominations remain legal tender,” he said.

According to him, the scarcity reflects evolving trends within the financial system, where more Nigerians are embracing electronic payment channels such as mobile banking, transfers, point-of-sale transactions and digital wallets.

“As more people adopt digital payment channels, the demand for coins and lower-denomination notes naturally declines,” Cardoso explained. “If there is less demand for them, there is less need to print and circulate them in large quantities.”

Beyond the shift towards a cashless economy, the CBN governor acknowledged that inflation and currency depreciation have also reduced the practical value of smaller notes, making them less useful for many everyday purchases.

“Currency devaluation has affected the purchasing power of lower-value notes. That is a reality,” he noted.

He added, however, that the broader expansion of financial inclusion across the country means fewer Nigerians now depend heavily on cash transactions involving lower denominations.

On the economy, Cardoso reiterated the CBN’s commitment to bringing inflation down to single digits, despite global and domestic challenges that have slowed progress in recent months.

He said the bank had previously recorded 11 consecutive months of disinflation and was optimistic that inflation would continue on a downward path before unexpected external shocks disrupted projections.

“It is important to remember where we are coming from,” he said. “We recorded 11 consecutive months of disinflation and expected that by early 2027 we would be where we wanted to be in terms of inflation, with a path towards single-digit inflation.”

“Unfortunately, we have experienced external shocks that were not anticipated and have lasted much longer than anyone expected. Nevertheless, we remain committed to our single-digit inflation target.”

Cardoso also addressed recent remarks by the International Monetary Fund (IMF), which suggested that the naira may be undervalued and estimated its fair value at around N1,150 to the US dollar.

Reaffirming the bank’s exchange-rate policy, he said the value of the naira should continue to be determined by market forces rather than by an official target.

“Our position remains unchanged,” he said. “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.”