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Nigerian Central Bank Dismisses Old Naira Banknote and Cash Shortage Rumors

The Nigerian central bank has dismissed rumors suggesting that the previously demonetized naira banknotes are no longer legal tender. According to the bank, all banknotes it has ever issued remain legal tender and “should not be rejected by anyone.”

No Shortage of Naira Banknotes Says the Central Bank

The Central Bank of Nigeria (CBN) has dispelled ongoing rumors suggesting that the previously demonetized naira banknotes are no longer legal tender. The bank also rejected reports of cash shortages in major cities across Nigeria.

In a statement issued on Nov. 8 via X (formerly Twitter), the bank said the laws governing its operations clearly state that all banknotes issued by the CBN “should not be rejected by anyone.” It added that CBN branches across the country have been told to continue issuing different denominations of both the old and redesigned naira banknotes.

Spearheaded by the then governor Godwin Emefiele, the Nigerian central bank’s demonetization process was started to ostensibly counter activities of parallel market foreign exchange dealers and currency hoarders. However, several local media reports at the time claimed the exercise was intended to derail then-presidential aspirant Bola Tinubu’s campaign.

CBN Warns Against ‘Panic Withdrawals’

As previously reported by News, the CBN’s attempt to demonetize old naira banknotes without injecting sufficient supply of the redesigned banknotes is thought to have caused cash shortages. After it initially refused to give in to the public’s demand for an extension of the deadline, the CBN eventually relented and the demonetized banknotes were made legal tender again.

Meanwhile, in its latest warning to entities and individuals who are rejecting the old banknotes, the CBN said:

“We wish to restate that all denominations of banknotes issued by the Central Bank of Nigeria (CBN) remain legal tender. In line with Section 20(5) of the CBN Act, 2007, no one should refuse to accept the naira as a means of payment.”

The bank also told the Nigerian public to guard against what it called panic withdrawals. It also encouraged the use of alternative modes of payment.

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