Old Banknotes To Remain Valid Indefinitely, Central Bank Of Nigeria Announces

The Central Bank of Nigeria (CBN) announced on Tuesday that the old banknotes — N200, N500, and N1,000 — will remain valid indefinitely.

"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 N200, N500 and N1,000 denominations; ad infinitum," CBN said, as per Punch.

The bank explained that this decision is aligned with international best practices and to forestall a repeat of earlier experiences. It added that all banknotes issued by CBN will remain legal tender even beyond the deadline of Dec. 31.

It was previously announced that the old banknotes would only be accepted until the end of the year. Although the bank later said the banknotes would be valid beyond this deadline, it did not disclose a specific timeframe.

But with the new announcement, the bank has made it clear that the old banknotes will never be out of circulation.

"The Central Bank of Nigeria is working with the relevant authorities to vacate the subsisting court ruling on the same subject. Accordingly, all CBN branches across the country will continue to issue and accept all denominations of Nigerian banknotes, old and redesigned, to and from deposit money banks," it said.

CBN also urged Nigerians to continue using "all Naira banknotes (old or redesigned) for day-to-day transactions and handle these banknotes with utmost care, to safeguard and protect the lifecycle of the banknotes."

The bank went on to ask all citizens to embrace alternative modes of payment, such as online payment solutions, for day-to-day transactions.

Victor Olojo, national president of the Association of Mobile Money and Bank Agents in Nigeria, praised the CBN's decision to retain both old and new banknotes.

"[It] is a good and positive development, particularly coming out to clear the speculations before December that was initially set, at least to forestall the scarcity issue that happened earlier in the year," Olojo said.

The government demonetized three denominations of the old naira bills — N200, N500 and N1,000 — in October 2022 as part of its currency redesign policy. The new notes were launched the following month. Other banknotes — N10, N20, N50 and N100 — have remained in use, as they would not be redesigned.

The demonetization caused the mopping up of over 70% of cash in the country and led to an estimated loss of N20 trillion.