The Central Bank of Nigeria (CBN) has officially refuted rumors suggesting that the previously demonetized naira banknotes are no longer considered legal tender, while also denying reports of cash shortages in major Nigerian cities.
In a statement released on November 8, conveyed through the platform formerly known as Twitter, the CBN emphasized that all banknotes issued by the institution, including the older ones, are still considered legal tender and should not be rejected by any party. Furthermore, the CBN has directed its branches across the country to continue distributing various denominations of both the old and redesigned naira banknotes.
The demonetization process, initiated during the tenure of Governor Godwin Emefiele, was initially intended to combat activities of parallel market foreign exchange dealers and currency hoarders. However, there were allegations in the local media that the exercise was politically motivated to undermine the presidential campaign of Bola Tinubu.
The attempt to demonetize the old naira banknotes without ensuring an adequate supply of the redesigned banknotes is believed to have contributed to cash shortages in the country. After initially resisting public calls for an extension of the deadline, the CBN eventually relented, making the demonetized banknotes legal tender once more.
In a stern warning to entities and individuals refusing the old banknotes, the CBN reiterated that all denominations of banknotes issued by the institution remain legal tender, as specified in Section 20(5) of the CBN Act, 2007. Any refusal to accept the naira as a means of payment is contrary to this regulation. Additionally, the CBN cautioned against panic withdrawals and encouraged the adoption of alternative payment methods.
This development reflects the CBN’s commitment to maintaining the integrity of the Nigerian currency and ensuring its smooth circulation within the economy. For further insights and discussions on this topic, please feel free to share your thoughts in the comments section below.
Frequently Asked Questions (FAQs) about Naira Banknote Legal Tender
Q: What is the Central Bank of Nigeria’s stance on old naira banknotes?
A: The Central Bank of Nigeria (CBN) has affirmed that all banknotes, including previously demonetized ones, remain legal tender and should not be rejected.
Q: Why were the old naira banknotes demonetized in the first place?
A: The demonetization process was initiated to combat activities of parallel market foreign exchange dealers and currency hoarders, although there were claims of political motives behind it.
Q: Did the demonetization cause cash shortages in Nigeria?
A: Yes, there were reports of cash shortages resulting from the attempt to demonetize old naira banknotes without ensuring an adequate supply of the redesigned banknotes.
Q: What action has the CBN taken in response to the situation?
A: The CBN eventually made the demonetized banknotes legal tender again after initially resisting calls for an extension of the deadline.
Q: Is there any legal basis for accepting old naira banknotes?
A: Yes, Section 20(5) of the CBN Act, 2007, stipulates that no one should refuse to accept the naira as a means of payment, including all denominations issued by the CBN.
Q: What advice has the CBN given to the public regarding the situation?
A: The CBN has warned against panic withdrawals and encouraged the use of alternative payment methods to mitigate disruptions in financial transactions.
More about Naira Banknote Legal Tender
- [Central Bank of Nigeria Statement](insert link here)
- [Background on Naira Banknote Demonetization](insert link here)
- [Reports of Cash Shortages in Nigeria](insert link here)
- [CBN Act, 2007 (Section 20(5))](insert link here)
- [CBN’s Advice on Handling the Situation](insert link here)