Fakoyejo Olalekan
The currency outside the banking system has declined to N2.57 trillion, the Central Bank of Nigeria (CBN) has disclosed in the latest data published on its website.
Prime Business Africa had reported that the cash outside the bank was N2.7 trillion as of September 2022 before the central bank proceeded with its Naira redesign policy.
Join our WhatsApp ChannelThe CBN policy centred on introducing new N200, N500 and N1,000 notes to mop the old Naira notes in circulation. The apex bank announced this in October last year.
According to the financial regulator’s head, Godwin Emefiele, the CBN plans to mop up the N2.7 trillion by replacing the old banknotes with fewer new currencies.
CBN went ahead to release the new banknotes in December, giving two months deadline to phase out the old currencies, as a result, persons hoarding the old legal tender have been depositing it into commercial banks.
CBN’s Naira redesign policy is working
Judging by the current cash in circulation, Prime Business Africa understands that the central bank is achieving one of its major purpose of the Naira redesign policy.
The apex bank had disclosed that N3.01 trillion is in circulation, but the banks are unaware of where N2.7 trillion cash is located.
According to the CBN data, about N160 billion has now been deposited into commercial banks since the CBN announced its plan to redesign the Naira notes.
This means the cash in circulation outside the vault of Nigerian banks dropped by 5.8 per cent between October to December, which is the period the data covered.
Recall that in November, CBN’s Director of Corporate Communications, Ostia Nwanisobi, stated: “The CBN is pleased to note the positive response of the banking public to the policy through increased currency deposits across banks and other financial institutions.”
Two weeks ago, Emefiele also stated that the Naira redesign policy is forcing hoarders to deposit the local currencies in their possession.
