Nigeria's Central Bank Extends Validity of Old Banknotes
12:52 15.11.2023 (Updated: 15:16 15.11.2023)
© AFP 2023 MICHELE SPATARIA vendor counts old and newly introduced Nigerian Naira banknotes in a market in Lagos on February 16, 2023.
© AFP 2023 MICHELE SPATARI
Last October, Nigeria announced it was ushering in new banknotes in denominations of 200, 500 and 1,000 naira for the first time in 19 years. According to the central bank, the move is aimed at fighting corruption and money laundering.
Nigerian banknotes containing the old design that were due to be taken out of circulation next month will now remain legal tender, the Central Bank of Nigeria announced.
"Without prejudice, the Central Bank of Nigeria wishes to inform the general public of its desire to extend the legal tender status deadline of the old design of 200, 500 and 1,000 naira denominations, ad infinitum," the statement said.
The bank said that all its branches would continue to issue and accept old Nigerian banknotes of all denominations beyond the original maturity date of December 31, 2023.
The prolongation is in line with "international best practices and to forestall a repeat of earlier experiences," the body explained.
The central bank also asked Nigerians to exercise caution in handling old-style local currencies in an effort to extend their usability. Moreover, the bank urged local residents to resort to electronic methods of conducting transaction.
Nigeria's President Bola Tinubu, who assumed office in May, campaigned against taking old banknotes out of circulation in order to ease economic tensions arising from a shortage of newly designed banknotes. Since taking office, he has implemented various reforms to boost economic growth, such as removing expensive fuel subsidies and liberalizing the foreign exchange market.
However, Nigeria faces challenges in the economic field, including a weakening of the local currency. In mid-June, the central bank allowed market forces to determine the naira's exchange rate. In four months, the naira has declined 8.9% against the dollar on the official market, the biggest drop since June 20, according to media reports.
In a bid to help the local currency reach a "fair price" by 2024, the government announced in late October that it planned to introduce new foreign exchange regulations, including a crackdown on illegal currency trading.
Nigeria's Central Bank Governor, Olayemi Cardoso, announced a day earlier that instead of directly intervening in fiscal matters, the institution will now focus on playing a more limited advisory role to support the government's economic growth program in the West African country.