CBN data show Nigeria’s healthy currency circulation at N2.39trn amid COVID-19 pandemic
TOTAL NIGE RIA’S CURRENCY IN circulation climbed to N2.39 trillion by the end of July from N2.29 trillion in June. This shows an increase of N95 billion or 4.1 per cent between the two months, data from the Central Bank of Nigeria (CBN) revealed.
An analysis of the data revealed that on quarter on quarter basis, the total currency in circulation fell to N2.29 at the close of the first quarter in 2020 while the figure increased by N5 million by the end of June 2020. This represents a 0.22 per cent increase between the first and the second quarter of 2020 respectively. The N2.29 trillion recorded at the end of March also indicates that there was a 7.5 per cent and 21.8 per cent contraction in the total currency in circulation when compared on quarterly basis between Q1 2019 and Q4 2019 respectively.
Despite the coronavirus pandemic which has changed how people go about their daily activities, cash transactions have continued to be on the rise in the economy as people tend to hold money for the sole aim of daily transactions.
Meanwhile, in accordance with the apex bank data, the reserve money (base money) rose by 17.1 per cent to N10.14 trillion at the close of March from N9.63 trillion in February 2020. This can be compared with the growth of 23.9 per cent and 13.5 per cent in the first and last quarter of 2019.
Similarly, the bank’s (CBN) liability to other depository corporations (bank reserves) rose by 26.1 per cent to N7.85 trillion in the first quarter of the year. This increase, when compared to the first and fourth quarters of 2019, shows fall in vault cash as a result of the increase in cash Reserves ratio by the CBN.
The net foreign assets (NFA) as at the close of the first 3 months in 2020 stood at N6.40 trillion from N5.65 trillion in February. This increase in assets shows that there was a 13.3 per cent rise between February and March.
However, a proper analysis of the currency in circulation within the economy revealed that an increasing proportion of the naira outside deposit money banks were held by the general public who stockpiled a lot of the new banknotes.