Currency in circulation drops by 0.2% to N2.79trn in May — CBN

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By Kayode Tokede

The Central Bank of Nigeria (CBN) has disclosed that currency in circulation dropped by 0.2 per cent to N2.79trillion in May from N2.79 trillion reported in April 2021.

Analysts stated that CBN currency mop-up contributed to dwindling currency in circulation.

The apex bank had disclosed that the physical currency in circulation rose by 1.04 percent to N2.81 trillion in March from N2.78 trillion reported in February this year.

The CBN in its data said currency in circulation was N2.82trillion in January.

Our correspondent gathered that currency in circulation hits all-time high at N2.91 trillion in December 2020.

The data by CBN in December however revealed that currency in circulation gained 29.3 per cent and 9.4 percent Year-on-Year and Month-on-Month growth respectively.

The CBN in a report had explained that, “The heightened uncertain outlook due to the lockdown encouraged more cash to be held by the public. This was evident from the increase in currency in circulation, compared with the level in the preceding month.”

The apex bank reported N2.66 trillion currency in circulation in November, the second highest in the year under review.

According to the apex bank, naira in circulation rose by three percent to N2.497trillion in October from N2.39trillon reported in September 2020.

The data by CBN disclosed that currency in circulation was N2.369trillion in August from N2.39trillion in July 2020.

However, the data, showed that N2.29trillioon and N2.35trillion was currency in circulation in June and May respectively.

In the first quarter of 2020, our correspondent gathered that currency in circulation was hovering around an average of N2.2 trillion.

In April, it was N2.3 trillion and March, N2.29trillion. Currency in circulation however, opened the year at N2.25trillion and closed February at N2.19trillion

The President, Bank Customers Association of Nigeria (BCAN), Dr Uju Ogubunka blamed informal sector not embracing cashless policy of the CBN  and infrastructures in rural areas to increasing currency in circulation in Nigeria.

According to him, “Nigeria will continue to have the experience of increasing currency in circulation until everyone are able to keen into alternative means of transactions settlement beyond cash.

“It will take sustained awareness and necessary infrastructure put in place across the nation.  There is need for rural areas to be captured in the cashless policy of the CBN.

“There are a lot of challenges facing cashless policy of the CBN. The policy introduced in 2002 is working but it will take some time to see the manifestation.”

Speaking from a different perspective, the Chief economist/head of research at PAC research, Mr. Moses Ojo attributed the decline in currency in circulation to weak spending by consumers.