The Central Bank of Nigeria has said that currency in circulation rose to N2.1 trillion at the end of November last year.
The data which represents a surge of N144 billion compared with N1.956 trillioNgbn reported in the proceeding month of October, confirms
people’s fear that spending for political campaign ahead of general election will increase cash in the financial system.
The fund in circulation in the month of November was the highest since December 2017 when it stood at N2.157 trillion and N2.0 trillion for the month of March this year.
For the month of September, Currency-in-circulation stood at N1.926 trillion, on month-on- month basis, failing by 0.1 per cent, compared with the decline of 4.0 per cent at the end of the August.
The development relative to the preceding month reflected the decline in its vault cash component.
Deposits of the Federal Government and the private sector with the CBN, on month-on-month basis, fell, while that of the deposit money banks rose, relative to the levels at end- August 2018.
Overall, aggregate deposit at the CBN declined by 2.4 per cent to N14,738.79 billion at end- September 2018. Of the total deposits at the CBN, the shares of the Federal Government, banks and the private sector were 48.2 per cent, 33.1 per cent and 18.7 per cent, respectively.
Reserve money rose by 1.7 per cent on month-on-month basis, to N6.802 trillion at end-September 2018, compared with the increase of 1.0 per cent at end-August 2018. This reflected the rise in banks’ reserves with the CBN.
It could be recalled that at the Monetary Policy Committee meeting for the month of November, the committee unanimously voted to retain the benchmark rates and observed that the near-term upside risks to inflation remained; the disruption to agricultural production and distribution arising from flooding, insurgency in the North-East, herdsmen-farmer crisis and high cost of energy.
Other factors for the increase in funds in the system accrding to a Communique signed by the Governor, Central Bank of Nigeria, Godwin Emefiele included anticipated spending in the run-up to Christmas festivities and campaign-related spending towards the upcoming 2019 general elections. Accordingly, the Committee enjoined the appropriate authorities to continue to address these challenges and to sustain the implementation of the 2018 budget and the Economic Recovery and Growth Plan of the Federal Government to ameliorate the supply side constraints.”
They also noted the likely aggregate demand boost from elections related spending.
