April 27, 2023

Currency outside banks rises 66% to N1.4 trn

CBN identifies 8 ways Naira can be abused

By Elizabeth Adegbesan

Currency Outside Banks, CoB, rose Month-on-Month (MoM) by 66 per cent to N1.4 trillion in March from N843 billion in February 2023.

This reflects the impact of the implementation of the Supreme Court order that old N200, N500, and N1,000 notes remain in circulation till December 31, 2023.

The Central Bank of Nigeria, CBN, Money and Credit data for March released today also showed that currency-in-circulation, CIC, stood at N1.68 trillion, representing a 71 percent rise from N982 billion in February 2023.

Recall that the implementation of the Naira redesign and withdrawal of old banknotes by CBN sucked in about N1.81 trillion from the Currency Outside Banks, CoB, while crashing Currency-in-Circulation to N1.4 trillion in January 2023.

The CBN Money and Credit data for January showed that Nigerians in response to the initial deadline of January 31st, 2023 deposited N1.81 trillion into the banking system in January.

Consequently, CoB, fell MoM by 70 per cent to N788.9 billion in January 2023 from N2.6 trillion in December 2022.

Also reflecting the impact of the initial deadline, currency-in-circulation (CIC) fell MoM by 54 per cent to N1.38 trillion in January 2023 from N3 trillion in December 2022 amidst the naira scarcity experienced in the country.

Part of the reasons for the Federal Government’s redesigning of the naira was to mop up excess cash outside the banking system and to rein in inflation.