Currency in circulation dropped by N10billion from N2.81trilion as of the end of March to N2.8tn as of the end of April.
According to the Central Bank of Nigeria, the figure dropped by N50billion in February from N2.83trillion as of January to N2.78trillion in February.
It had earlier dropped by N70billion in January from N2.9trillion as of December 2020.
Currency in circulation is the money outside the vaults of the CBN; that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks.
The apex bank currency in circulation rose from N2.5trillion as of the end of October to N2.66trillion in November.
The CBN stated that it employed the “accounting/statistical/withdrawals & deposits approach” to compute the currency in circulation in Nigeria.
This approach involved tracking the movements in currency in circulation on a transaction basis.
That is, for every withdrawal made by a Deposit Money Bank at one of CBN’s branches, an increase in CIC was recorded, and for every deposit made by a DMB at one of CBN’s branches, a decrease in CIC was recorded.
The transactions were all recorded in the CBN’s CIC account, and the balance on the account at any point in time represented the country’s currency in circulation.
According to the apex bank, analysis of the currency in circulation showed that a large and increasing proportion of the Nigerian currency outside the commercial banking system was held by the general public who hoard a lot of the new banknotes.
The CBN also disclosed that broad money supply declined in January 2021 due, largely, to the fall in net domestic assets of depository corporations, which more than offset the growth in net foreign assets.
As a result of the growth in net foreign assets of the CBN which outweighed the decline in that of other depository corporations.
Nigeria’s currency in circulation drops by N10bn
NGOZI AMUCHE
Currency in circulation dropped by N10billion from N2.81trilion as of the end of March to N2.8tn as of the end of April.
According to the Central Bank of Nigeria, the figure dropped by N50billion in February from N2.83trillion as of January to N2.78trillion in February.
It had earlier dropped by N70billion in January from N2.9trillion as of December 2020.
Currency in circulation is the money outside the vaults of the CBN; that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks.
The apex bank currency in circulation rose from N2.5trillion as of the end of October to N2.66trillion in November.
The CBN stated that it employed the “accounting/statistical/withdrawals & deposits approach” to compute the currency in circulation in Nigeria.
This approach involved tracking the movements in currency in circulation on a transaction basis.
That is, for every withdrawal made by a Deposit Money Bank at one of CBN’s branches, an increase in CIC was recorded, and for every deposit made by a DMB at one of CBN’s branches, a decrease in CIC was recorded.
The transactions were all recorded in the CBN’s CIC account, and the balance on the account at any point in time represented the country’s currency in circulation.
According to the apex bank, analysis of the currency in circulation showed that a large and increasing proportion of the Nigerian currency outside the commercial banking system was held by the general public who hoard a lot of the new banknotes.
The CBN also disclosed that broad money supply declined in January 2021 due, largely, to the fall in net domestic assets of depository corporations, which more than offset the growth in net foreign assets.
As a result of the growth in net foreign assets of the CBN which outweighed the decline in that of other depository corporations.