The Central Bank of Nigeria, CBN, has stated that the value of Naira currency in circulation has risen to N3.87tn at the end of March.
This was revealed in the latest money and credit statistics on the CBN website. The report stated that the currency in circulation was N3.87tn, higher than N3.69tn in February and N3.65tn in January.
The apex bank, however, stated that currency outside banks have also increased progressively during the first quarter. It said the Naira outside the bank grew from N3.28tn in January to N3.41tn. And N3.63tn in February and March, respectively.
According to the data, over 90 per cent of currency in circulation is held outside of the banking system. This, it said, indicated Nigerians are holding more cash in their possession.
The report was in tandem with the views expressed by some members of the Monetary Policy Committee, MPC.
One of the members, Muhammad Abdullahi, at their March meeting, posited that the apex bank had identified high currency outside banks as one of the monetary drivers of the country’s inflation.
He said, “From available data, prices of domestic food items remain the major driver of headline inflation. This is because of supply shortages and high cost of logistics and distribution.
“While this cannot be directly influenced using monetary policy tools, the bank’s response to the drivers of headline inflation is targeted at addressing identified monetary drivers such as money supply growth, exchange rate depreciation and Currency-Outside-Banks. The combined impact of which will dampen inflationary pressure significantly.”
The report maintained that in January 2024, at the height of the currency redesign policy, currency in circulation stood at N1.386tn. While the percentage of the cash outside the banks stood at 57 per cent at N792.184bn.
“By February, the cash outside banks rose to N843.311bn. This represented 85.9 per cent of the N982.097bn that was in circulation.
“It dropped further in March to 85.8 per cent with N1.445tn of the N1.683tn CIC, outside the banking system.
source: PUNCH
