Money and Credit Data released by the Central Bank of Nigeria (CBN) for May 2023 revealed that currency outside the banks has risen for the fifth consecutive month to N2.18 trillion, which is about 86.22 per cent of the total currency in circulation (CIC), put at N2.53 trillion.
Analysis of the data showed that currency in circulation rose by 5.8 per cent from N2.38 trillion in April to N2.53 trillion in May.
The rise is slowly sprinting to the prehistoric peek of N2.73 trillion of currency outside banks as of September 2022, which was 85 per cent of N3.2 trillion of CIC.
A 10-month breakdown that prompted the naira redesign policy showed a N3.23 trillion currency in circulation in September 2022, N3.29 trillion in October 2022, November 2022, N3.16trillion and December 2022, N3.01 trillion.
Further analysis showed that in January 2023, currency in circulation was N3.29trillion, February 2023, N982billion, March 2023, N1.68trillion, April 2023, N2,38trillion, and N2.53 trillion in May.
Also, the 10-month breakdown of currency outside the banks revealed that the month of September was N2.72 trillion, October N2.83 trillion, November N2.65 trillion and December N2.57; while January recorded its lowest at N792 billion, February N843 billion, March N1.45 trillion, April N2.07 trillion and N2.18 trillion for the month of May.
According to experts, the significant increase is primarily attributed to the spillover effect of the cash crunch. They suggested that average Nigerians are hoarding the new notes and refraining from depositing them in banks due to a lack of trust in electronic banking systems.
