Cardoso Explains Scarcity of N100, N200 Notes

Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has explained that the reduced circulation of N100 and N200 notes is mainly the result of the growing use of digital payment methods and the falling value of the lower denominations due to inflation.

Speaking after Tuesday’s Monetary Policy Committee (MPC) meeting in Abuja, Cardoso dismissed claims that the Central Bank had withdrawn the two denominations from circulation. He said both N100 and N200 notes remain legal tender and should continue to be accepted for payments across the country.

He urged Nigerians not to reject the notes, explaining that the CBN had not announced the withdrawal of any denomination of the naira. According to him, every existing naira note remains valid unless the apex bank officially states otherwise.

Cardoso explained that the reduced availability of the lower denominations is not the result of any policy to remove them from circulation. Instead, he said it reflects changes in the way Nigerians now carry out financial transactions.

According to the CBN governor, the rapid growth of digital payment platforms and wider financial inclusion have reduced the need for physical cash, particularly smaller denominations such as N100 and N200 notes.

He also pointed out that the depreciation of the naira has reduced the purchasing power of the lower-value notes, making them less useful for everyday spending than they were in previous years.

Cardoso said the changing pattern of demand within the financial system is responsible for the reduced circulation of the notes, adding that more Nigerians now rely on electronic payment channels instead of cash for daily transactions.

Speaking on inflation, the CBN governor said the bank remains focused on restoring price stability and bringing inflation down to single digits despite recent global economic challenges that have slowed progress.

He recalled that Nigeria had recorded 11 straight months of declining inflation before unexpected external developments disrupted that trend. According to him, the bank had expected inflation to continue falling towards its target by early 2027 before the global shocks affected the economy.

Despite those setbacks, Cardoso said the CBN remains committed to achieving single-digit inflation through its monetary policies.

On the foreign exchange market, Cardoso responded to the International Monetary Fund’s assessment that the naira is undervalued, with an estimated fair value of around N1,150 to one US dollar.

He maintained that the exchange rate should be determined by market forces rather than fixed administrative targets. According to him, the CBN will continue to support a transparent foreign exchange market based on a willing-buyer, willing-seller system.

The governor explained that exchange rates are influenced by several economic factors, including oil export earnings, foreign direct investment, domestic production and efforts to reduce imports.

Cardoso also expressed satisfaction with recent improvements in the foreign exchange market. He said increased liquidity and stronger investor confidence have contributed to better market performance.

According to him, Nigeria now operates a more transparent and open foreign exchange market, with daily trading volumes exceeding one billion dollars on some occasions.