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By Chinwendu Obienyi
Amid a surge in cash transactions, the Central Bank of Nigeria (CBN) has revealed currency in circulation (CIC) in the Nigeria economy grew to N19.67 trillion in the first nine months of 2023.
This marked a substantial rise considering that the figure had depreciated at the end of February.
According to the data obtained from the apex bank’s website, CIC had started the year brightly, standing at N1.39 trillion as at January 2023 only for it fall to N982.1 billion as of the end of February 2023, due the Naira redesign policy of the apex bank.
It however maintained a steady rise when the policy ended, as it increased to N1.68 trillion and cash earlier withdrawn from circulation in order to drive e-payments, was returned back into the economy. The figure kept increasing and stood at N2.48 trillion, N2.53 trillion, N2.60 trillion, N2.59 trillion, N2.66 trillion and N2.76 trillion in April, May, June, July, August and September respectively.
Hence, the total money in circulation during 9 months stood at N19.67 trillion. The CBN defined the currency in circulation 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.
The bank noted that it employed the “accounting/statistical/withdrawals & deposits approach” to compute the currency in circulation in Nigeria while adding that this approach involved tracking the movements in currency in circulation on a transaction-by-transaction basis.
According to the CBN, for every withdrawal made by a Deposit Money Bank at one of CBN’s branches, an increase in CIC is recorded; and for every deposit made by a DMB at one of CBN’s branches, a decrease in CIC is recorded.
It also stated that the transactions listed were all recorded in its CIC account, and the balance on the account at any point in time represents the country’s currency in circulation. The accuracy of the CIC figure reported on the bank’s website is a function of the postings made into the CIC account of the bank at the 37 branches across the country.
The CBN however operates a robust reconciliation/call-over system which serves to highlight erroneous or non-impacted postings made into the CIC account in order to have them resolved within the shortest possible time.
This ensures that the CIC figure reported by the bank at any point is free from material error.
