The amount of Currency In Circulation (CIC) in the country dropped by N51.34 Billion in February as inflation continues to rise and purchasing power of Nigerians shrinks.
The amount of currency in circulation was N2.83 trillion in January and dropped to N2.78 trillion in February, according to the latest figures obtained from the Central Bank of Nigeria on Monday.
According to the CBN, currency in circulation started plunging in December last year, reducing from N2.91 trillion as of the end of December to N2.83 trillion as of the end of January 2021.
CIC refers to the amount of cash within a country that is physically used to conduct transactions between consumers and businesses.
It refers to all of the money that has been issued by a country’s monetary authority, minus cash that has been removed from the system, including the portion of the overall supply being stored in current and savings accounts.
The CBN has a mandate to regulate the volume of money supply in the economy in order to ensure monetary and price stability.
The National Bureau of Statistics (NBS) reported 16. 47 percent inflation rate for January driven by the rising food inflation.
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Also, massive job losses and high unemployment put at 33.3 per cent according to the National Bureau of Statistics has affected the purchasing power of Nigerians.
Meanwhile, analysts said the impact of the recent blockade of food supply from the North to South would be felt in the inflation figures of March.
According to them, high-powered money and the massive borrowing of the Federal Government via the CBN has impacted inflation.
The analysts at Financial derivatives Company stated that the impact of the crowding out of private investors from the public debt market by the CBN printing money is now playing out in higher price inflation.
The analysts said in the last two months, a divergence between the direction of month-on-month and annual inflation had been observed due to the base year effects and supply shocks.