CEM REPORT, FINANCE | The Central Bank of Nigeria (CBN) has said it has since recovered N1.9 trillion worth of currency previously held outside of the banking system.
The recovery reduces the currency outside the banking system to N900 billion from a whopping N2.7 trillion following the announcement of new naira notes.
The CBN governor Godwin Emefiele on Sunday, 29th January 2023, as part of his update following a meeting with President Buhari attributed the recovery to the naira notes redesign and cash swap .
“Ladies and gentlemen, available data at the Central Bank of Nigeria has shown that in 2015, currency in circulation was only N1.4 trillion.”
“As of October 2022, currency in circulation had risen to N3.23 trillion; out of which only N500 billion was within the banking industry and N2.7 trillion held permanently in people’s homes.”
“Ordinarily, when CBN releases currency into circulation, it is meant to be used and after effluxion of time, it returns to the CBN thereby keeping the volume of currency in circulation under the firm control of the CBN.”
On the deadline extension, Emefiele noted that a 7-day grace period from 10 to 17 February 2023 is given to Nigerians to allow the depositing of old notes at the CBN after the deadline, in compliance with Sections 20(3) and 22 of the CBN Act.
The CBN governor explained that the extension of the deadline by 10 days to 10th February 2023 is to allow for the remaining old notes in the economy to be returned to the banks.
“A 10-day extension of the deadline from January 31, 2023, to February 10. 2023; to allow for the collection of more old notes legitimately held by Nigerians and achieve more success in cash swap in our rural communities after which all old notes outside the CBN lose their legal tender status.”
“Our CBN staff currently on mass mobilization and monitoring together with officials of the EFCC and ICPC will work together to achieve these objectives.”
It is expected that the recovery of circulating currency by the central bank, will help make monetary policy more effective in taming the inflation rate.