Currency-in-circulation Hits N2trn

Currency-in-circulation on month-on-month basis fell by 0.7 per cent to N2.00 trillion at the end of September 2019, in contrast to the growth of 0.8 per cent at the end of the preceding month.

The Central Bank of Nigeria (CBN) revealed this in its economic report for October 2019.
The development, relative to the preceding month, reflected the fall in both its currency outside banks and demand deposit components.

According to the report, on month-on-month basis, deposits of banks and the private sector with the CBN rose, while deposits of the federal government with the CBN declined, relative to the levels at the end of the preceding month.
It stated that overall, aggregate deposit, at the CBN, declined by 1.7 per cent to N13.847 trillion at the end of September 2019.

“Of the total deposits at the CBN, the shares of the federal government, banks and the private sector were 43 per cent, 36.1 per cent and 20.9 per cent, respectively.
“Reserve money rose by 0.3 per cent to N7,000.3 billion at end-September 2019. The upward movement in reserve money reflected, mainly, the 0.7 per cent increase in deposits of banks with the CBN.

“Aggregate credit to the domestic economy (net), on month-on-month basis, grew by 4.8 per cent to N35,918.2 billion at end-September 2019, compared with the growth of 2.5 per cent and 7.0 per cent at the end of the preceding month and the corresponding period of 2018, respectively. “The development was attributed to the respective increase of 10.6 per cent and 2.6 per cent in net claims on the Federal Government and claims on the private sector,” the report explained.

Relative to the level at the end of December 2018, aggregate credit to the domestic economy (net), rose by 30.3 per cent, compared with the growth of 24.3 per cent and 1.9 per cent at the end of August 2019 and the corresponding period of 2018, respectively.

Furthermore, the report noted that net claims on the federal government, on month-on-month basis, grew by 10.6 per cent to N10.452 trillion at the end of September 2019, compared with the growth of 3.4 per cent and 54.9 per cent at the end of August 2019 and the corresponding period of 2018, respectively. “The growth in net claims on the federal government reflected the increase in holdings of government securities by the Central Bank of Nigeria. Over the level at the end of December 2018, net claims on the federal government rose significantly by 114.8 per cent, compared with the growth of 94.3 per cent at the end of the preceding month.

“Relative to the level at end-August 2019, banking system credit to the private sector rose by 2.6 per cent at end-September 2019, compared with the growth of 2.2 per cent apiece at the end of the preceding month and the corresponding period of 2018.

“The development was attributed to the 1.7 per cent and 9.0 per cent increase in claims on the core private sector and claims on the state and local government, respectively. “Over the level at end-December 2018, banking system credit to the private sector grew by 12.1 per cent, compared with the growth of 9.3 per cent and three per cent at the end of the preceding month and the corresponding period of 2018, respectively,” it stated.

In addition, the report noted that net foreign assets (NFA) of the banking system, on month-on-month basis, fell by 11.4 per cent to N13.911 trillion at the end of September 2019, compared with the decline of 11.1 per cent at the end of the preceding month.

It, however, contrasted with the growth of 2.2 per cent recorded at the end of the corresponding period of 2018.
The fall in NFA was due, wholly, to the nine per cent decline in foreign asset holdings of the CBN.
Over the level at end-December 2018, NFA fell by 24.4 per cent at end-September 2019, compared with the decline of 14.7 per cent at end-August 2019, but was in contrast to the growth of 21.2 per cent at the end of the corresponding period of 2018.