Inflation may worsen as total currency in circulation hits 3-month high

Inflationary pressure on the Naira might strengthen in the short term as the total currency in circulation enlarged from N2.29 trillion at the end of March to N2.3 trillion at 30th April, its highest in three months.

This translates to N11.38 billion growth going by the data gleaned from the Central Bank of Nigeria (CBN) website Thursday.

The total circulated currency in the country had dipped by N61 billion from N2.24 trillion at the end of January to N2.18 trillion at the same period in February.

Between the end of October 2019 and last December, the figure had escalated from N2.05 trillion to N2.44 trillion, reflecting a 19% rate of increase in just a quarter.

“Currency-in-circulation at end-November 2019 rose by 9.9 per cent to N2.2tn, in contrast to the decline of 0.4 per cent at end of third quarter 2019.

“The development, relative to the level in the preceding quarter reflected mainly the increase in its currency outside banks component and seasonal factors,” a statement from the CBN stated.

Read also: Total declares N6.71 per share dividend for Full Year 2019 ahead of Q1 results

By November 2019, total deposits at the central bank were valued at N14.35 trillion, having risen by 3.6 per cent over the figure reported as of third quarter 2019.

The CBN linked the growth to the expansion in the size of the fund mopped up from commercial banks and the Nigerian government, which rose by 3.1 per cent and 14.3 per cent in that order.

The Nigerian government accounted for 47.4 per cent, the private sector 35.9 per cent and banks 16.7 per cent of the total deposits at the apex bank.

Reserved money grew 5 per cent to N7.35 trillion at November ending relative to a 13.5 per cent plunge posted at third quarter 2019, the CBN stated.

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