The Central Bank of Nigeria plans to reduce the number of N500 and N1000 notes in circulation to curb inflation.
The governor of the Central Bank of Nigeria, Godwin Emefiele, disclosed this during the Monetary Policy Committee meeting o November 22, 2022.
Plans to introduce lower denomination underway
The CBN helmsman was responding to questions about counterfeiting essential notes.
He said the effort to reduce inflation which he partly blamed on the higher-denominated notes.
He was responding to questions about the ease of counterfeiting one thousand naira notes and if there are plans to reduce the volumes.
Emefiele said in the UK, the 50 pound is the most spent bill, followed by the 20 pounds, stating that Nigeria has the opposite.
He said more N500 and N1000 notes are in circulation than the lower ones.
Emefiele said:
“So in fact, yes we will launch N200, N500, and N1000 over time we will reduce the volume of N500 and N1000 in circulation. Let people carry N50 around.”
According to reports, the announcement by Emefiele will affect the volume of cash transactions in Nigeria as Nigeria is still heavily dependent on cash despite CBN’s cashless policy.
Analysts believe businesses relying on cash transactions will suffer but would favour the much-touted cashless economy of the CBN.
The comment by the CBN boss may trigger a backlash from financial and monetary analysts.
