The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said that the apex bank planned to reduce the volume of N500 and N1000 notes in circulation “over time” as part of its moves to tame the spiking inflation in the economy.
The governor, who spoke on the move while responding to questions about the ease of counterfeiting the N500 and N1,000 notes if there are plans to reduce their volumes during the media briefing on the decisions taken at the Monetary Policy Committee’s meeting on Tuesday, used the experience in the UK to justify the latest move by the bank.
Emefiele maintained that efforts aimed at curbing the inflation rate were not achieving the desired result and partly blamed the high denominated Naira notes on the lapse.
He explained: “In the UK they have a denomination of 50 pounds but the most spent denomination is 20 pounds. Nobody spends 50 pounds. If you go around carrying 50 pounds in the UK they will suspect sic report you in fact.
The reverse is what is happening in Nigeria. Nigerians want to carry N500 and N1000. And in fact, we are beginning to think that increasing the high denomination is also part of what is fueling inflation. So in fact, yes we will launch N200, N500, and N1000 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 program, embrace our mobile banking programme, that is what you need”, Emefiele added.
He also spoke in support of contactless banking which will boom with FinTech companies who have invested heavily in this sector.
