The Central Bank of Nigeria (CBN) has recently disclosed that currency outside banks soared to N2.26tn by the end of June 2023, indicating an impressive 185.68% increase (N1.47tn) since January 2023 when it stood at N792.18bn.
During the same period, currency in circulation in the country witnessed a remarkable 87.05% surge (N1.21tn), rising from N1.39tn in January 2023 to N2.6tn in June 2023. It is worth noting that there was a temporary dip earlier, dropping by 235.03% to N982.09bn at the end of February from N3.29tn at the close of October 2022, largely attributed to the naira redesign policy of the CBN.
In an effort to maintain financial stability, the CBN reported mopping up N2.3tn from circulation during the review period. The CBN defines “currency-in-circulation” as all legal tender currencies held by the public and within the vaults of Deposit Money Banks, excluding the central bank’s vaults. The computation of currency in circulation in Nigeria is conducted using the ‘accounting/statistical/withdrawals and deposits approach,’ as stated by the CBN.