The Central Bank of Nigeria (CBN) has revealed that plans to gradually phase out the old N200, N500, and N1,000 naira banknotes are currently underway, as the issuance of new notes continues.
The move is part of the apex bank’s efforts to redesign and optimize the currency management system in the country.
Folashodun Shonubi, the acting Governor of the CBN, made this announcement on Tuesday following the Monetary Policy Committee (MPC) meeting at the CBN headquarters in Abuja.
The initiative was first introduced in October 2022 by Godwin Emefiele, the CBN Governor, who outlined the plan to introduce a new series of three banknotes while gradually phasing out the existing eight denominations.
According to the original schedule, the redesigned N200, N500, and N1000 notes were due for circulation starting on December 15, 2022. Governor Emefiele had emphasized that the old notes would remain legal tender until January 31, 2023.
The decision to introduce new banknotes and retire the old ones was driven by the CBN’s ongoing concerns regarding the management of currency in circulation, particularly those outside the banking system.
Providing updates on the demonetization policy, Acting Governor Shonubi revealed that the old notes are being gradually replaced with new notes.
He clarified that the replacement process occurs whenever commercial banks request new notes. The CBN is diligently exchanging old notes for new ones, ensuring a smooth transition between the two series.
Shonubi explained that the CBN aims to maintain an optimal level of currency in circulation and that the primary focus is on replacement rather than excessive issuance.
The ongoing process has been conducted seamlessly, with the banking institutions obtaining new notes from the CBN as needed. This measured approach ensures a steady transition from old to new notes, without causing disruption or fanfare.
Furthermore, data published on the CBN’s website indicated a significant increase in the naira in circulation by 71.41 percent following the movement of naira notes from the CBN’s vault to deposit money banks in the previous month.
As of March 2023, the naira in circulation rose to N1.68 trillion, up from N982 billion in February of the same year.
The CBN remains committed to the secure and efficient management of the national currency, and the ongoing phase-out of old banknotes represents a significant step towards enhancing the overall currency management system in the country.
