Currency In Circulation Drops To N2.78tn

The currency in circulation in the country dropped to N2.78 trillion in February from N2.83 trillion as of January 2021 – a N50 billion different.

The figures obtained from the Central Bank of Nigeria disclosed that the currency in circulation dropped by N70bn in January from N2.9tn as of December 2020.

Analysis showed that the currency in circulation had dropped for three months consecutively since its last rise in November 2020.

According to the CBN, currency in circulation rose from N2.5tn as of the end of October to N2.66tn in November 2020.

The CBN defined the currency in circulation as currency outside the vaults of the Central Bank; that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks.

The CBN stated that it employed the “accounting/statistical/withdrawals & deposits approach” to compute the currency in circulation in Nigeria as the approach involved tracking the movements in currency in circulation on a transaction by transaction basis.

That means that 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.

Also, 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.