Data released by the Central Bank of Nigeria (CBN) indicates a significant surge in currency in circulation (CIC) in Nigeria, with a notable increase of N1.7 trillion due to a rise in cash transactions.
The CIC report reveals that as of the end of August, the total currency in circulation reached N2.7 trillion.
The currency in circulation had declined to N982.1 billion by the end of February 2023. This drop was attributed to the naira redesign policy implemented by the CBN.
READ ALSO: How FCT, States Lose Trillions Due to Unpaid Ground Rents
It, however, maintained a steady rise when the policy ended, and cash earlier withdrawn from circulation in order to drive e-payments, was returned back into the economy.
The currency in circulation in the country had dipped by a 235.03 percent to N982.1 billion at the end of February from N3.29 trillion at the end of October 2022, on the back of the naira redesign policy of the CBN.
Figures obtained from the CBN revealed that N2.3 trillion was mopped up from circulation during the period under review.
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 said it employed the “accounting/statistical/withdrawals and deposits approach” to compute the currency in circulation in Nigeria.
READ ALSO: Benue Information Commissioner Abducted from His Residence
It said this approach involved tracking the movements in currency in circulation on a transaction-by-transaction basis.
According to the CBN, 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.
