Nigeria’s central bank governor, Olayemi Cardoso, has said that smaller naira notes—including N5, N10, N20, N50 and N100—remain valid as legal tender in the country. Cardoso made the point during his response to questions at the briefing held after the 306th meeting of the Monetary Policy Committee (MPC) on Tuesday.
Legal tender status of smaller naira notes
Cardoso said the shortage of lower-denomination currency in circulation should be understood through normal market dynamics rather than any change in legal status. He emphasized that the Central Bank has not introduced any directive withdrawing these notes from use.
- Cardoso stated that the lower naira denominations are still legal tender.
- He added that, unless the central bank has announced otherwise, the public should treat these notes as legal tender.
- He attributed the perceived scarcity of smaller notes to demand and supply conditions.
- He said the question of why there are not as many of these notes in circulation as some observers expect is fundamentally a matter of demand and supply.
MPC decision and the inflation backdrop
During the same MPC process, the apex bank kept the benchmark interest rate unchanged at 26.50%, marking the second straight meeting in which the rate was held. The decision came as inflation stood at 15.91% in June.
- The Monetary Policy Committee retained the interest rate at 26.50%.
- The hold was maintained for the second consecutive meeting.
- Inflation was reported at 15.91% for June.
