CBN Governor Cardoso Explains Why N100, N200 Notes Are Scarce Nationwide

The Central Bank of Nigeria (CBN) Governor Olayemi Cardoso has said the growing scarcity of N100 and N200 notes is not due to a withdrawal from circulation but a result of more Nigerians switching to digital payments and the declining purchasing power of low-value currency. Cardoso made the remarks after the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.

Digital Payments and Inflation Driving Scarcity

Cardoso reassured Nigerians that neither the N100 nor the N200 note has been removed from circulation. He said: “Yes, they remain legal tender. Unless the central bank states otherwise, Nigerians should assume that all existing denominations remain legal tender.”

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. “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,” Cardoso said.

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. 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 Still Targeting Single-Digit Inflation by Early 2027

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. “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,” he said.

Cardoso Responds to IMF on Naira Valuation

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. He said the CBN would continue supporting a foreign exchange market where transactions are based on willing buyers and sellers.

Separately, the Supreme Court has nullified the ban on using the old N200, N500 and N1000 banknotes as legal tender. The apex court gave this ruling in a unanimous decision by a seven-member panel of justices, holding that the old banknotes should remain legal tender.

For Nigerian consumers and businesses, the declining circulation of lower-denomination notes signals a deeper shift toward a cashless economy, but it also raises questions about access for those still reliant on physical cash for daily transactions.