Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has attributed the apparent scarcity of N100 and N200 notes to the increasing adoption of digital payment channels and the declining purchasing power of the lower-denomination currency.

Speaking on Tuesday after the Monetary Policy Committee (MPC) meeting in Abuja, Cardoso dismissed concerns that the affected notes had been withdrawn from circulation, stressing that they remain legal tender and should continue to be accepted for transactions across the country.

He said the CBN had not announced the withdrawal of any naira denomination and urged Nigerians not to reject the lower-value notes.

“Yes, they remain legal tender. Unless the Central Bank states otherwise, Nigerians should assume that all existing denominations remain legal tender,” Cardoso said.

Explaining the reduced circulation of the N100 and N200 notes, the CBN governor said the situation reflects changing demand patterns within the financial system rather than any deliberate policy to phase them out.

According to him, the expansion of financial inclusion and the widespread use of electronic payment platforms have significantly reduced reliance on physical cash, particularly lower denominations.

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Cardoso also noted that the depreciation of the naira has eroded the purchasing power of the smaller notes, making them less useful in day-to-day transactions.

“As to why there appear to be fewer of these notes in circulation, it is largely a matter of demand and supply. The financial ecosystem is evolving in the direction we want it to, with greater financial inclusion and increased digitisation,” he said.

“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.”

On inflation, Cardoso reaffirmed the apex bank’s commitment to restoring price stability and achieving single-digit inflation, despite recent global economic shocks that have slowed progress.

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He recalled that Nigeria had recorded 11 consecutive months of declining inflation before external factors disrupted the disinflation trend.

“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.