Currency in circulation fell by 6.0percent to N2, 296.17billion at the end of March 2020, compared with a decline of 7.5 percent at the same time in 2019.
According to the first quarter economic report of the Central Bank of Nigeria (CBN), this was in contrast to the growth of 21.8 percent recorded at the end of the fourth quarter of 2019.
The development, relative to the level in the preceding quarter, reflected mainly the decline in currency outside depository corporations, and the fall in vault cash, owing to the increase in Cash Reserve Ratio (CRR) by the Bank.
The monetary authority’s liabilities to other depository corporations grew by 26.1 per cent to N7, 853.18 billion at end-March 2020, compared with the growth of 24.7 per cent and 23.6 per cent in the fourth quarter of 2019 and the first quarter in 2019, respectively.
The development reflected on the increase in CRR by the CBN. Reserve money also grew by 17.1 per cent to N10, 149.36 billion at end March 2020, compared with the growth of 23.9 per cent and 13.5 percent in the fourth quarter of 2019 and the first quarter of 2019.
The development also reflected mainly on the 3.7 per cent growth in net foreign assets on the assets side and 26.1 per cent growth in total banks reserves on the liabilities side.
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Analysis of financial market key indicators was relatively stable in the review period. However, as the global economy reeled from the effects of the COVID-19 pandemic, oil prices plunged, following Saudi Arabia’s oil price slash and the unprecedented disruptions in global supply chains.
Global stock markets also turned bearish, as share prices plunged worldwide. The level of liquidity in the period rose, as a result of the repayment of matured CBN bills, maturing Federal Government Bonds and Nigerian Treasury Bills, as well as, fiscal disbursements to the three tiers of Government.