Currency Outside Banks Increased by N108.67bn to N2.84trn in October

As the Central Bank of Nigeria (CBN) steps up effort to redesign N200, N500, and N1,000 notes currently in circulation, currency outside the banks added N108.67billion to N2.84 trillion in October 2022 from N2.73 trillion in September, the CBN money and credit statistics has revealed.

According to the CBN data, currency outside the banks appreciated by 11.07 per cent Year-on-Year (YoY) from N2.54 trillion reported in corresponding period of 2021.

The money and credit Statistics revealed that currency outside banks hit the highest record of N2.84trillion in October.

While defending its decision to redesign the Naira, the apex bank in October expressed that some individuals were stockpiling huge amounts of cash outside the banking system.

The CBN Governor, Godwin Emefiele had in a statement said, “Significant hoarding of banknotes by members of the public, with statistics showing that over 85 per cent of currency in circulation are outside the vaults of commercial banks.

“To be more specific, as at the end of September 2022, available data at the CBN indicate that N2.73 Trillion out of the N3.23 trillion currency in circulation, was outside the vaults of Commercial Banks across the country; and supposedly held by the public.

“Evidently, currency in circulation has more than doubled since 2015; rising from N1.46 trillion in December 2015 to N3.23 trillion in September 2022. This is a worrisome trend that cannot be allowed to continue.”

The statistics revealed that currency-in-circulation (CIC) grew YoY by 11.22 per cent to N3.3 trillion in October 2022 from N2.97 trillion in 2021.

CIC in October gained 2.17 per cent or N70.03billion to N3.3trillion in October from N3.23trillion reported by the CBN in September, the Statistics disclosed.

Anaalyst and President, Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka attributed the increasing CIC to politicians spending towards the 2023 primary elections.

According to him, “Politicians are spending more money and it will definitely affect not just currency in circulation alone but the foreign exchange market. It will get worst when politicians start the main campaign towards 2023. As you likely know, the online system has not been effective and even it does, cash will still be the main drivers for politicians and it has its implications on our national economy.”

He expressed that with the increasing demand for currency, the CBN has to print more and factor in the distributing cost.

He noted that prices of some goods and services are likely to increase when there is a hike in currency in circulation, stating that the inflation rate is also likely to appreciate further.

The story continues online on www.thisdaylive.com