The Central Bank of Nigeria (CBN) has reported that currency outside the vaults of Nigerian banks declined to an all-time of N788.92 billion in January as the currency swap implementation continues to gain deeper traction nationwide.
The apex bank indicated that the policy measure had enabled banks to mop up about N1.78 trillion from the public space over the past few weeks, thus reducing the currency outside the banks which stood at N2.57 trillion last December to the N788.92 billion last month, the lowest since December 2015.
According to the data, the total currency in circulation together with the volume in the vaults of the banks during the month in review stood at N1.39 trillion.
It would be recalled that the apex bank governor, Godwin Emefiele, had last October announced the new currency notes redesign policy which, he explained, was introduced to phase out the old N200, N500 and N1,000 banknotes and replace them with new ones.
Since the implementation of the policy which initially sets January 31, 2023 deadline for the old notes as legal tender, the apex bank has been mopping up the banknotes from circulation amid serious challenges that made it to revise the implementation guidelines, including the latest which extended the validity of the N200 as legal tender to April 10, 2023.
President Muhammadu Buhari also on February 16, 2023 in an early morning broadcast approved the extension of the legal tender status of N200, saying that the decision was sequel to the hardships were going through in accessing the newly designed banknotes.
Data from the CBN indicated that over the past four years, the currency in circulation had been increasing, thereby making it difficult for it to moderate the nation’s inflation rate solely through monetary policy measures.
For instance, it reported that in December 2018, the total currency in circulation rose to N2.33 trillion and that by the end of December 2022 it surged to over N3 trillion, following its interventions to mitigate the impact of the Covid-19 pandemic on the country.
