Currency in Circulation Falls by N1.39trn, as Naira Scarcity Intensifies

The currency in circulation has significantly dropped by N1.39 trillion. According to new data released by the Central Bank of Nigeria (CBN), the currency in circulation fell to N1.39 trillion in January 2023, from N3.23 trillion in September 2022.

This represents a 57% decline in the amount of cash circulating in the economy. Analysts attribute this decline to a number of factors, including the implementation of the cashless policy, the rise in the use of electronic payment channels, and the impact of inflation on the purchasing power of consumers.

The amount of naira in circulation increased by 141% since February 2023, when the country faced a severe cash shortage that sparked protests and economic turmoil.

According to the latest data from the CBN, the currency in circulation reached ₦2.76 trillion in September 2023, up from ₦982.1 billion in February 2023, the lowest level since 2016.

The decline in currency in circulation may also have negative effects on the economy. For example, it could lead to a reduction in economic activities, as businesses and consumers may have less cash available to spend as witnessed in the past few days.

Although, the CBN has attributed the shortage to large amount withdrawal by Deposit Money Banks (DMB) and panic withdrawal by banks customers, who are not depositing enough cash in return.

The apex bank has insisted that there is enough currency in circulation to meet all demands for this season.