According to data from the Central Bank of Nigeria (CBN), the amount of currency in circulation in Nigeria has surged by N1.7 trillion as cash transactions have increased.
As of the end of August, the currency in circulation had reached N2.7 trillion.
This follows a dip in currency in circulation to N982.1 billion at the end of February 2023, attributed to the CBN’s naira redesign policy.
Steady increase in currency in circulation
However, after the policy concluded, and cash that had been withdrawn to promote electronic payments was reintroduced into the economy, the currency in circulation began to steadily rise.
The CBN tracks currency movements on a transaction-by-transaction basis to calculate the currency in circulation.
For every withdrawal made by a Deposit Money Bank at a CBN branch, an increase in currency in circulation is recorded, and for every deposit made by a DMB at a CBN branch, a decrease in currency in circulation is recorded.