Currency in circulation has reached an all-time high of N4.1trillion as of August 2024, Data from the Central Bank of Nigeria (CBN) has shown.
This is just as currency outside the banks also grew to 3.86 trillion in the month under review.
The data showed a steady increase in currency in circulation, growing from N4.05 trillion in the previous month of July to N4.1 trillion in August, according to the Apex Bank’s Money and Credit Statistics.
Daily Trust reports that the currency in circulation has continued to grow since the beginning of the year starting with N3.65 trillion currency in circulation in January.
In February, the currency in circulation slightly increased to N3.69 trillion representing an increase of N43 billion or 1.18 per cent from the January figure.
March also saw an appreciable increase to N3.87 trillion while it further increased to N3.92 trillion in the following month of April.
The growth trajectory continued in May with the currency in circulation increasing slightly to N3.97 trillion, an increase of N42 billion or 1.07 per cent while it reached an all-time high of 4.04 trillion, an increase of 2.11 per cent from May.
The July figure also rose marginally with the currency in circulation settling for N4.05 trillion before growing to N4.14 trillion in August.
On a year-on-year basis, the August 2024 figure has almost doubled the 2023 figure of N26.6 trillion.
For currency outside banks, the CBN data indicated that there has been a slight increase since the beginning of the year, hovering around N3.28 trillion and N3.86 trillion which it settled in August, an appreciable increase from July figure of N3.66 trillion.
Analysts say the rise in currency in circulation reflects the rise in economic activities in Nigeria and most significantly the increased allocation to the sub-nationals.
Financial analyst, Ayokunle Olubunmi attributes the rise in CIC to increase in revenue and the devaluation of the naira.
He cautioned that the situation should be properly managed as it could be responsible for the rising inflation.
More so he stated that the situation could affect CBN’s management of the high cost of printing more currencies.
He added, “Unfortunately the funds are not moving in productive sectors of the economy.”
The analyst further stated that while revenues to the three tiers of government had increased tremendously, the impact is not reflecting in the economy.
“So assuming those funds are actually moving into different productive sectors of the economy, you would realise that all these funds would generate activities and you would see more productivity.
“Those funds are not being used in a very productive way.”
Daily Trust reports that the CBN has encouraged cash deposits by suspending processing fees since May 2024 initially for six months before extending it till March 2025.
The idea was to ensure that depositors would not incur additional costs while making significant cash deposits.
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