The old N200, N500, and N1,000 notes are being phased out “slowly,” according to the Central Bank of Nigeria (CBN), in favor of newly designed notes.
Following the Monetary Policy Committee (MPC) meeting of the CBN on Tuesday in Abuja, Acting CBN Governor Folashodun Shonubi announced this.
The apex bank also raised the Monetary Policy Rate (MPR), which measures interest rate, from 18.5 percent to 18.75%.
Responding to questions from reporters, the acting apex bank chief said, โWhen a currency is printed and sent out, it is expected that it will go through a number of cycles, and then over time, will become one and then be replaced. Thatโs what weโre doing.
โWe had to put out or re-put out old notes. And as theyโre coming in, theyโre being processed and returned to us as not issuable. We are then bringing out and replacing them with the new notes.โ
Shonubi said there is an โoptimal level of currencyโ in circulation and what is being done at the moment is replacing worn out notes with new ones.
โWe believe that we have an optimal level of the currency out there and so much of whatโs being done is replacement to keep the level, rather than just putting money out there,โ he said.
โAnd that is seen by the fact that the banks, whenever they come to us for notes, we provide it to them. If it wasnโt enough, they will be asking us for more. If it was too much, theyโll be dumping that much more on us.
โSo, we will slowly, and over time you will see the old notes replaced out of the system with the new notes thatโll be the norm.
โAnd that will be out of practice, not fanfare, youโll just see it slowly morph from old to new.โ
Last October, now suspended CBN Governor, Godwin Emefiele, announced plans to redesign the three highest naira bills and asked Nigerians to deposit their old notes before January 31, 2023, when they would cease to be legal tender.
The naira crunch caused economic turmoil as many Nigerians suffered hardship, leading to riots in some states and the burning of some banks and Automated Teller Machines (ATMs).
The apex bank subsequently said then President Muhammadu Buhari had approved an extension of the deadline for the naira swap.
Some then governors of the All Progressives Congress (APC) dragged the CBN and the Federal Government to the Supreme Court and the apex court ruled in March 2023 that the old N200, N500, and N1,000 notes would remain as legal tender until December 31, 2023.
