Currency in Circulation Drops by N4.59bn to N3.24trn in March

Nume Ekeghe

The Central Bank of Nigeria (CBN) has disclosed that currency in circulation dropped Month-on-Month (MoM) by N4.59 billion or 0.14 per cent in March 2022 to N3.24 trillion from N3.25 trillion in February 2022.

The apex bank in its Money and Credit Statistics had reported N3.29 trillion money in circulation in January 2022.

Nigeria’s currency circulating in the economy has recorded significant growth since the Central Bank maintained its dovish monetary approach as a means to ensure the recovery of the nation’s economy, following the recession recorded in 2020, caused by the covid-19 pandemic.

Several intervention policies pushed currency in circulation to its highest level in history in December 2021.

However, it has recorded a decline in three consecutive months, dropping by N37.13 billion in January and N37.84 billion in February 2022.

According to CBN, banks’ credit to the private sector rose MoM, by 1.07 per cent to N36.37 trillion in March from N35.18 trillion in January 2022.

The reported figure by CBN is the highest banks’ credit to the private sector as the apex bank maintained its 65 per cent Loan-to-deposit (LDR) policy that sustained banks’ lending to real sector.

Aside banks’ lending to private sector increasing, the banks’ lending to government also grew by 10.8 per cent to N16.3 trillion in March 2022 from N14.72 trillion reported by the CBN in February this year.

The data also revealed that net domestic credit also rose MoM by 3.9 per cent to N52.69 trillion in March 2022 from N50.7 trillion in February 2022, signifying an uptick in economic activities.

The Deputy Governor, Financial System Stability, CBN, Aisha Ahmad had stated in her MPC notes that improvements in the macroeconomy were propelled by a resilient financial system which channelled significant credit to support growth enhancing sectors such as agriculture, manufacturing and general commerce, as well as individuals and households.

Furthermore, Economist & Private Sector Advocate, Dr Muda Yusuf had explained to THISDAY that the apex bank has no doubt been quite bullish about lending to the real sector and the Small and Mid-size Enterprises (SMEs), stressing that there are various intervention funds- the LDR, and other credit boosting measures by the apex bank.