CbnGovernor of Nigeria’s central bank, Godwin Emefiele, has stated that the apex bank intends to gradually decrease the amount of N500 and N1000 notes in circulation, Nairametrics reported.
This was said by the governor during his media conference during the monetary policy communiqué on November 22, 2022.
While replying to inquiries about how simple it is to counterfeit 1,000 naira notes and whether there are any efforts to reduce the volume, Emefiele asserted that the initiative is intended to reduce inflation, which he partially attributed to the introduction of higher-denominated naira notes.
He said, “In the UK they have a denomination in 50 pounds but the most spent denomination is 20 pounds. Nobody spends 50 pounds. If you go around carrying 50 pounds in the UK they will suspect sic report you in fact.
“The reverse is what is happening in Nigeria. Nigerians want to carry N500 and N1000. And in fact, we are beginning to think that increasing the high denomination is also part of what is fueling inflation. 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.
“if you want to do high-value transactions, embrace online, embrace our agency program, embrace our mobile banking program, that is what you need”
Emefiele hinted that if the central bank pursues this course of action, it might have an impact on some members of the economy.
Businesses that depend significantly on cash will be negatively impacted since they would have to carry more smaller-denominated notes to make transactions possible.
On the other hand, as the policy would encourage more online transactions, this will benefit electronic banking.
Politicians who are primarily involved in cash-based transactions will need to use lower amounts or find other ways to pay for cash-based election expenses.
This will also have an impact on party guests who enjoy throwing money around.
