The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Nigerian Federation. It controls the volume of money supply in the economy in order to ensure monetary and price stability. The Currency & Branch Operations Department of the CBN is in charge of currency management, through the procurement, distribution/supply, processing, reissue and disposal/disintegration of bank notes and coins.
The Central Bank of Nigeria was established by the CBN Act of 1958 and commenced operations on July 1, 1959. Objectives of the bank as stated in the CBN Act are:
- to maintain the external reserves of the country
- to promote monetary stability and a sound financial environment
- to act as a banker of last resort and financial adviser to the federal government
Nevertheless, the government through the central bank has been actively involved in building the nation’s money and equity centers, forming securities regulatory board and introducing treasury instruments into the capital market.
The CBN’s early functions were mainly to act as the government’s agency for the control and supervision of the banking sector, to monitor the balance of payments according to the demands of the federal government and to tailor monetary policy along the demands of the federal budget.