Data released on Tuesday by the Central Bank of Nigeria (CBN) showed that at the end of July, currency-in-circulation rose by a marginal N11.974 billion or 0.76 per cent from N1.562 trillion on June 30, 2015 to N1.574 trillion on July 31, 2015.
Although, it could not be ascertained, as of press time, whether the ongoing monetary policy decisions of the apex bank are by any means affecting the currency in circulation, some analysts believe that the ban on the use of foreign exchange purchased from official sources and the decision by banks not to accept foreign currency deposits which started in the month of July, the period under consideration, could also be responsible for the tamed growth.
An analyst, Matthew Ogagavworia, said: “The decision of the CBN not to allow payment of dollars into domiciliary accounts was majorly responsible, (as a result), domiciliary account holders quickly sold their (U.S.) Dollars to get Naira. The period saw heavy movement from Dollar to Naira, where else do you want this Naira to be, it would first be in the hands and then be paid into the customers’ bank accounts.”
On a year-on-year, the currency level increased by N93.961 billion or 6.34 per cent from N1.48 trillion at the end of June last year.
Between June and July last year, currency in circulation jumped by N89.631 billion or 5.91 per cent from N1.48 trillion to N1.568 billion.
On a year-on-year basis, the quantum of Naira in circulation peaked at the height of the last general elections in March, when it stood at N1.808 trillion, the highest in the past few years.
An analysis of the March figure shows that it rose by N185.926 billion or 11.45 per cent, when compared with the N1.622 trillion recorded at the end of the preceding month.
Before last March, the peak for currency in circulation was in December 2014, when it stood at N1.797 trillion, followed by N1.776 trillion in the corresponding period of 2013.
Since climbing to N1.155 trillion in December 2008, currency in circulation in the country has remained at the trillion Naira mark with slight increases and decreases on a monthly basis.
Daily Independent reports that the latest Central Bank money and credit statistics obtained on Wednesday also showed that broad money (M2), which generally is made up of demand deposits at commercial banks and moneys held in easily accessible accounts increased to N19.142 trillion as at March, from N18.871 trillion at the end of February.
Similarly, Narrow Money (M1), which includes all physical moneys such as coins and currencies along with demand deposits and other assets held by the Central Bank, also grew from N6.729 trillion in the month of February to N6.729 trillion in the month of March.
According to the latest Central Bank money and credit statistics for March obtained, the total amount of Deposit Money Banks’ (DMBs’) reserves with the CBN increased to N4.118 trillion as at March, as against the N4.079 trillion it stood at the end of February.
Bank reserves are DMBs’ deposits with the Central Bank that are not to be lent out. It is held as part of risk management measures.
However, credit to the private sector decreased slightly from N18.711 trillion in February to N18.579 trillion in the month under review. Net Domestic Assets also grew marginally to N13.156 trillion in March, from N13.033 trillion the previous month, while Net Foreign Assets climbed marginally to N5.985 trillion in the month of March, as against the N5.837 trillion it attained in February.
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