The Central Bank of Nigeria (CBN) says it is mulling reduction of the amount of higher denominations — N500 and N1000 — in circulation.
Fielding questions from newsmen at the monetary policy committee (MPC) meeting in Abuja on Tuesday, Godwin Emefiele, governor of CBN, said the move is aimed at addressing Nigeria’s soaring inflation.
Emefiele said increasing the high denomination of the currency could be part of factors fuelling inflation in the country.
Making reference to the United Kingdom, he said the highest denomination in the UK is £50, adding that the most spent currency in the country is £10.
“Rarely you find some people spend £20. Nobody sees £50. If you go around carrying £50 in the UK, they will begin to suspect you. Whereas, the reverse is what is happening in Nigeria. Nigerians want to carry N1,000 or N500,” he said.
“In fact, we’re beginning to see or think that increasing the high denomination bills is also part of what may even be fuelling inflation.
“So, over time, we will reduce the volume of N500 and N1000 in circulation.
“Let people carry N50 around. If you want to do high-value transactions, embrace online, embrace our agency programme, embrace our mobile banking programme. That is what you need. You want to conduct legal banking or financial services transactions, you have no business carrying N1,000.”
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