CBN Report Shows Hoarding Increased Despite the Naira Redesign Policy

The Central Bank of Nigeria (CBN), in its recently released data, shows that there has been an increase in hoarding of the nation's currency in November 2023, which has been the highest according to records.

This was according to the apex bank's Money and Credit Statistics data. It states that total currency in circulation (CIC) for November last year stood at N3.35 trillion, while currency outside the banks is N3.08 trillion, signifying 92% of the overall CIC.

The recent records show that it has surpassed the previous record, which stood at N2.73 trillion in currency outside banks in September 2022, signifying 85% of the N3.2 trillion CIC. The increase, which was noticed last year, made the Central Bank implement the naira redesign policy to cushion the hoarding of Naira.

The breakdown of the eleven-month trend reveals that in January 2023, CIC stood at N3.29 trillion, followed by February at N982 billion, March at N1.68 trillion, April at N2.38 trillion, and May at N2.53 trillion. 

In June, there was a little increase as it stood at N2.6 trillion, with a marginal dip to N2.59 trillion in July. August was N2.66 trillion, September was N2.76 trillion, October was N3.01 trillion, and November 2023 rounded it to N3.35 trillion.

The breakdown of currency outside banks for the same period shows that January stood at N792 billion, followed by a slight increase in February, which was N843 billion. March jumped to N1.45 trillion, April stood at N2.07 trillion, and May was N2.18 trillion. June recorded N2.26 trillion, July N2.21 trillion, August N2.22 trillion, September N2.42 trillion, October N2.7 trillion, and a continued upward trend to N3.08 trillion in November 2023.

However, November 2023 was the highest level for both circulation currency and outside banks. CIC and money outside the banks reached the highest with 92%.

"Addressing the underlying factors driving this phenomenon is imperative, necessitating a sustainable approach to encourage the widespread adoption of electronic banking," a market analyst comments.