According to the recent money and credit data released by the CBN, the currency in circulation rose by ₦18 billion.
In January, the CIC stayed at ₦3.65 trillion and increased to ₦3.69 trillion in February.
However, the CIC outside banks vault rose from ₦3.28 trillion in January to ₦3.41 trillion and ₦3.63 trillion in February and March, respectively.
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Data shows that over 90% of the CIC is held outside of the banking system, suggesting that Nigerians are retaining more cash.
A member of the Monetary Policy Committee, Muhammad Abdullahi, said the CBN knows there is too much money outside the bank vault.
In his statement, he recognised this as one of the factors driving the country’s inflation.
Abdullahi said: “The rising prices of domestic food items remain the major driver of headline inflation.
“He said supply shortages and high cost of logistics and distribution contribute to this problem.
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“The CBN is addressing the drivers of headline inflation by using several monetary drivers combined.
“Monetary drivers such as money supply growth and exchange rate depreciation will dampen inflationary pressure significantly”.
In January 2024, currency in circulation under the currency redesign policy totaled ₦1.386 trillion, representing 57% or ₦792.184 billion outside banks.
By February, cash outside banks rose to ₦843.311 billion, representing 85.9% of the total ₦982.097 billion. This is just a direct opposite of what Nigerians witnessed in 2023.
In March, this percentage slightly decreased to 85.8%, with ₦1.445 trillion of the ₦1.683 trillion in circulation held outside banks.
