Nigeria’s currency in circulation rose to N3.25 trillion in March 2022, representing the highest since December 2021.Currency in circulation, CIC is the amount of cash in paper notes or coins issued by the apex bank to conduct transactions.
The development came barely one month after the Central Bank of Nigeria, CBN increased CIC by N418 billion. The apex bank said in March that increase in CIC is due to Nigerians preference for cash in settling transactions, adding that higher denominations have dominated currency in circulation.
The CBN said in its report on currency operations that, “the growth in CIC reflected the continued dominance of cash in the economy. Analysis of the CIC shows that a greater proportion was in higher denomination banknotes (N100, N200, N500 and N1000). The higher denomination banknotes together accounted for 63.47 per cent and 98.08 per cent of the total CIC, in terms of volume and value, respectively.
“The volume of lower denomination banknotes (N5, N10, N20, N50) accounted for 28.43 per cent of the total CIC and 1.92 per cent, in terms of value as at end-December 2020.”
The Cable reports that the latest data from the Central Bank of Nigeria, CBN indicates that the figure rose by 16 per cent from N2.79 trillion in April 2021 to N3.25 trillion in March 2022.
In May 2021, currency in circulation stood at N2.79 trillion, N2.74 trillion in June and up to N2.81 trillion in July.
In August, September and October 2021, it was N2.78 trillion, N2.84 trillion, and N2.97 trillion, respectively.
Currency in circulation hits the historical N3trillion mark in November 2021 as banks customers withdraw physical cash amid the festive period.
In November, it crossed the N3 trillion mark ahead of the festive season in December. By December, it peaked at a record N3.33 trillion.
In 2022, it amounted to N3.29 trillion in January and N3.25 trillion in February.
Last year, the apex bank said its clean note policy and banknote fitness guidelines provide that every newly printed and existing banknote should measure up to predefined standards before circulation and re-circulation in the economy.
The CBN said it used the “accounting/statistical/withdrawals and deposits approach” to compute the currency in circulation in the country.
It said this approach involved tracking the fluctuations in currency in circulation on a transaction-by-transaction basis.
According to the CBN, for every withdrawal made by a deposit money bank, DMB at any CBN branch, an increase in currency in circulation, 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 represented the country’s currency in circulation.
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