Currency outside banks drops to N2.57trn

The Central Bank of Nigeria (CBN) has recorded significant progress in its effort to mop up cash in the economy.

In its latest data published on its website, CBN revealed that currency outside the banking system has declined to N2.57 trillion as at December 2022.

This is a 9.52 percent or N270.06bn drop when compared to N2.84 trillion as at October 2022 when the naira redesign policy was first announced.

The CBN data also shows that between the end of October 2022 and the end of December, currency in circulation reduced by 8.70 percent from N3.29 trillion to N3.01 trillion.

In announcing the policy on October 26, CBN governor, Godwin Emefiele, had stated that the new currency notes would become legal tender as from December 15, 2022, adding that the old and new notes will circulate concurrently for a period of 45 days until January 31, 2023, when the former would cease to be legal tender.

He explained that the move was aimed at checking the increasing ease and risk of currency counterfeiting evidenced by several security reports, the increased risk to financial stability as well as the worsening shortage of clean and fit currency.

READ ALSO:CBN urges Nigerians to adopt eNaira as alternative to currency notes

The CBN governor also said there was significant hoarding of naira notes by members of the public, with data showing that over 80 per cent of the currency in circulation was outside the vaults of the commercial banks.

He disclosed that as of September 2022, a total of N3.2 trillion was in circulation, of which N2.73 trillion was outside the vaults of the banks, a development, he said was unacceptable.

Although the CBN did release the new notes to lenders on December 15 as scheduled, bank customers quickly began complaining about the scarcity of the new naira notes and what appeared to be evidence of currency hoarding by Deposit Money Banks (DMBs).

The new notes scarcity worsened as the initial January 31 deadline drew closer thus leading Emefiele to announce on January 30, that the apex bank, with the approval of President Muhammadu Buhari, had extended the deadline by 10 days, from the January 31st 2023 to February 10, 2023 to allow Nigerians still in possession of the old naira notes deposit such with their banks.

In addition, he also announced a seven-day grace period, starting from February 10 to February 17, 2023 to allow Nigerians to deposit their old notes at the CBN after the February deadline when the old currency would have ceased to be legal tender.

Emefiele, who appealed to Nigerians to work with the Central Bank to ensure a hitch-free process for implementation of the policy, revealed that since the commencement of the programme, the CBN had collected about N1.9 trillion, meaning that it was targeting about N900 billion with the new deadline.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now