Currency in Circulation Falls 2.6tn to 2.59tn in Five Months

The total amount of currency-in-circulation in the country dropped from N2.6tn (N2,603,266m) as of the end of June 2023 to N2.59tn (N2,595,761m) as of the end of July 2023.

This is the first time the figure has dropped since February 2023.

Figures obtained from the Central Bank of Nigeria showed this represents a drop of N7.51bn in one month.

Currency-in-circulation is defined 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, according to the apex bank.

The CBN stated that it employed the “accounting/statistical/withdrawals and deposits approach” to compute the currency in circulation in Nigeria.

This approach involved tracking the movements of currency in circulation on a transaction-by-transaction basis.

It said for every withdrawal made by a DMB at one of CBN’s branches, an increase in the CIC was recorded, adding that for every deposit made by a DMB at one of CBN’s branches, a decrease in the CIC was recorded.

The transactions are all recorded in the CBN’s CIC account, and the balance on the account at any point in time represents the country’s currency in circulation.

Prior to January 2023, the total amount of currency-in-circulation in the country dropped from N3.29tn as of the end of October 2022 to N1.38tn as of the end of January 2023 as a result of the naira redesign policy of the CBN.

Figures obtained from the CBN showed this represents a drop of N1.91tn in the three-month period.

The suspended Governor, CBN, Godwin Emefiele, had, in October 2022, announced plans to redesign the old N200, N500, and N1,000 notes.

Emefiele also announced deadlines for Nigerians to swap their old with the new notes.

The suspended governor said, “Accordingly, all Deposit Money Banks currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately. 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.”

He decried the challenges associated with currency management, including significant hoarding of banknotes by members of the public, with statistics showing that over 80 per cent of currency-in-circulation was outside the vaults of commercial banks.