Nigerian currency in circulation hits a record high of 2.97 trillion naira for October 2021 – Nairametrics
Total currency in circulation in Nigeria reached a record high of 2.97 trillion naira in October 2021, data from the central bank’s monetary and credit statistics show.
Currency in circulation is the total amount of physical cash represented in paper or coins used to conduct transactions in Nigeria. It also represents the money that was issued by the CBN network which was also withdrawn. It also includes cash in commercial bank vaults ready for release to customers looking to withdraw their money.
At 2.9 trillion naira, the currency in circulation is 128.9 billion naira higher than the 2.837 billion naira recorded in September 2021 and 467 billion naira more than recorded in October of the year. correspondent of 2020.
Total currency in circulation has increased by around 2,000 billion naira since November 2018 and has remained above that level since then. It hit a first record in December 2020 when it touched 2.91 billion naira before falling for most of 2021.
A 2014 CBN publication “Found that, according to the model specification, structural variables such as the exchange rate and interbank rate, and dummy variables for elections and holidays were significant in explaining changes in the CIC.” This suggests that elections in Nigeria are playing an important role in the demand for physical currency in the country.
What does that mean
The latest increase in currency in circulation indicates an increase in demand for physical silver in Nigeria and may have been precipitated by high inflationary effects on goods and services as well as the various intervention programs of the apex bank.
- Unfortunately, the CBN in its Monetary Policy Committee briefing last week did not refer to the increase in currency in circulation or explain why we are at an all time high.
- Rather, he explains that the money supply increased by 7.10% in October 2021, against 4.72% in September 2021.
- Money supply growth was driven by growth in net domestic assets (DNA) of 9.12% in October 2021, compared to 10.71% recorded in September 2021.
- On the other hand, net foreign assets (NEA) contracted slightly by -1.50% in October, against -20.85% the previous month.
- The continued growth in net domestic assets (NDA) has been largely due to increased claims on the federal government and other non-financial public corporations, the private sector, and state and local governments.
What you should also know
The Central Bank of Nigeria publishes closely watched money and credit statistics data that provides insight into how money is flowing in the country.
- The data includes credit to the private sector which reached 34.9 trillion naira in October, another all-time high according to our records. Credit to the government fell to 12.8 trillion naira from 13 trillion naira recorded in September 2021.
- We also observe that the uncirculated currency rose to 2.5 trillion naira in October from 2.3 trillion naira a month earlier.
- The total money supply (M2) in Nigeria now reaches an all-time high of N41.3 trillion in October 2021.
The central bank recently launched its eNaira digital currency initiative, which aims to help deepen financial inclusion in the country. Wider adoption of eNaira is expected to stifle physical liquidity in the economy, especially that triggered by government intervention funds and cash distributions.