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From Uche Usim, Abuja
The currency in circulation (CIC) in Nigeria has swelled to N2.7 trillion as at the end of August, showing a remarkable recovery from a slump of N982.1 billion it was in February, owing to the naira redesign policy.
This comes from data sourced at the Central Bank of Nigeria (CBN).
By definition, currency-in-circulation is the currency outside the vaults of the CBN. It speaks to all legal tender currencies in the hands of the public and in the vaults of the commercial banks.
Since February with the formal suspension of the naira redesign policy, the CIC has been on a steady rise trajectory and cash earlier withdrawn from circulation in order to drive e-payments, returned to the economy to keep it liquid.
In the wake of the naira redesign policy, N2.3 trillion was mopped up from circulation during the period under review.
The CBN said it employed the “accounting/statistical/withdrawals & deposits approach” to compute the currency in circulation in Nigeria.
It added that the approach involved tracking the movements in currency in circulation on a transaction-by-transaction basis.
According to the apex bank, 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.
Analysts described the liquidity level of the country as adequate and must not be flooded by excess cash.
