Currency in circulation dips for first time in 5 months
By Jeph Ajobaju, Chief Copy Editor
Total currency-in-circulation (CIC) dipped by N7.51 billion, from N2.6 trillion in June to N2.59 trillion in July, according to the latest data released by the Central Bank of Nigeria (CBN).
The data shows this first time the figure has dropped since February.
The CBN defines CIC as currency outside its vaults; that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks (DMBs) otherwise known as commercial banks.
The apex bank said it used the “accounting/statistical/withdrawals and deposits approach” to compute the CIC which involved tracking the movements of currency-in-circulation on a transaction-by-transaction basis.
For every withdrawal made by a bank at a CBN branch, it explained, an increase in the CIC is recorded and the balance in the CIC account at any point in time represents the currency in circulation.
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Currency design policy
Total CIC had slashed from N3.29 trillion in October 2022 to N1.38 trillion in January 2023 as a result of the naira redesign policy of the CBN, a drop of N1.91 trillion, per The PUNCH.
Suspended CBN Governor Godwin Emefiele announced in October 2022 plans to redesign the old N200, N500, and N1,000 notes.
“All Deposit Money Banks currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately,” he said.
“The newly designed currency will be released to the banks in the order of first-come-first-serve basis.
“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them to withdraw the new banknotes once circulation begins.”
Emefiele listed the challenges of currency management to include significant hoarding of banknotes by members of the public, with statistics showing more than 80 per cent of CIC outside the vaults of commercial banks.