Currency in circulation rose by N29bn to N2.81trn as of the end of March from N2.78trn in February, the latest figures obtained from the Central Bank of Nigeria has shown.
The CBN defined the currency in circulation as currency outside the vaults of Central Bank; that is, all legal tender in the hands of the general public and in the vaults of the Deposit Money Banks.
Analysis of the CBN data also showed that currency in circulation dropped by N50bn in February from N2.83trn as of January. It had earlier dropped by N70bn in January from N2.9trn as of December 2020.
The apex said, currency in circulation rose from N2.5trn as of the end of October to N2.66trn 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 by transaction basis.
That is, for every withdrawal made by a Deposit Money Bank at one of CBN’s branches, an increase in CIC is recorded, and for every deposit made by a DMB at one of CBN’s branches, a decrease in CIC is recorded.
The transactions are all recorded in the CBN’s CIC account, and the balance on the account at any point in time represents 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.