Once upon a time in Nigeria, there was a rise in the amount of money being held outside of banks. The Central Bank of Nigeria, the guardian of the country’s monetary system, released the latest figures that revealed this interesting trend.
According to figures that were obtained from the Central Bank, the amount of currency outside banks increased by a whopping 185.68 percent, equivalent to N1.47tn, between January 2023 and June 2023. To put it simply, from N792.18bn in January, the currency outside banks soared to N2.26tn by June!
But that’s not all. CBN also discovered that the currency in circulation across the country grew by an impressive 87.05 percent, equivalent to N1.21tn, from January to June 2023. In January, the total currency in circulation was N1.39tn, but by June, it had surged to N2.6tn.
Interestingly, there was a slight dip in currency circulation prior to this surge. At the end of February, the amount of money in circulation had fallen by a significant 235.03 percent, reaching only N982.09bn from a previous high of N3.29tn in October 2022. This drop was attributed to the naira redesign policy implemented by the Central Bank.
During this period, the Central Bank of Nigeria managed to mop up N2.3tn from circulation. It was quite an effort to collect such a huge sum of money!
The Central Bank explained that “currency-in-circulation” refers to the money outside the central bank’s vaults, including all legal tender currencies held by the public and the Deposit Money Banks.
To compute the precise amount of currency in circulation in Nigeria, the Central Bank used a method called the “accounting/statistical/withdrawals and deposits” approach.
So, with these new figures in mind, it appears that more Nigerians are keeping their money outside of banks, perhaps for various reasons. The rise in currency outside banks certainly caught the attention of the country, leaving many intrigued by this monetary phenomenon.
Source:Punch
