Bank demand deposits increased by N1.1 trillion in three months to N16.89 trillion at the end of March, according to numbers released by the Central Bank of Nigeria (CBN) on Wednesday.
According to the CBN, the value increased from N15.81 trillion at the end of January to N16.17 trillion at the end of February.
A demand deposit account allows depositors to withdraw money on demand and when needed, without requiring advance notice.
Between January and March, the CBN reported an N42.43 billion decrease in cash in circulation.
The CBN stated in its currency data that the currency decreased from N3.29 trillion at the end of January to N3.25 trillion by the end of March.
It defined currency in circulation as currency outside the vaults of the central bank; that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks.
The CBN stated that it employed the “accounting/statistical/withdrawals and deposits approach” to compute the currency in circulation in Nigeria.
This method entails tracking the movement of currency in circulation transaction by transaction.
It stated that every withdrawal made by a DMB at one of CBN’s branches resulted in a rise in the CIC, while every deposit made by a DMB at one of CBN’s branches resulted in a decrease in the CIC.
The CBN’s CIC account keeps track of all transactions, and the account’s balance at any given time represents the country’s currency in circulation.
According to the apex bank, an examination of the money in circulation revealed that the general public kept a considerable and growing share of the Nigerian currency outside the commercial banking sector, hoarding many of the new banknotes.