Post Views: 212 The Central Bank of Nigeria (CBN), currency-in-circulation (outside of bank vaults) at the end of the month of December 2018 stood at ...
The Central Bank of Nigeria (CBN), currency-in-circulation (outside of bank vaults) at the end of the month of December 2018 stood at N2.329tr, representing a N219.581bn, or 10.45% rise in the festive month of December, when compared to N2.1tr in the corresponding period of November.
It however represented a rise of N162.481bn, or 7.53% year-on-year from the N2.157tr reported in December 2017, according to data available on the apex bank’s website; lower than N203.973bn, or 10.76% YoY rise from N1.896tr in November 2017, a further review of the CBN data showed.
In its fourth quarter 2018 report published last weekend, the CBN said the level recorded last December was 20.9% higher, when compared with the growth of 1.4% at end-September 2018.
The increase is however not unexpected, in view of the huge political spending ahead of this year’s general elections which begins in a fortnight with the Presidential election, described as a two-horse race between incumbent President Muhammadu Buhari and former ally, Alhaji Atiku Abubakar, candidates of the All Progressives Congress (APC) and Peoples Democratic Party (PDP) respectively.
The rising in currency-in-circulation “relative to the preceding quarter reflected, mainly, the 19.4% and 7.5 % increase in its currency outside banks and demand deposit components, respectively,” the CBN report noted.
Already, the increased liquidity has been captured by the nation’s Consumer Price Index published for the month by the National Bureau of Statistics (NBS), showing that inflation rate rose by 11.44% in December, from 11.28% in November, following growth across the various divisions.
At its January meeting, members of the CBN’s Monetary Policy Committee (MPC) expressed concerns at the resurgence in inflationary pressure in the economy, noting concerns by the NBS that the “increase in headline inflation was driven by food inflation which rose to 13.36% in December 2018 from 13.3% in November, while Core inflation declined marginally to 9.77% in December 2018 from 9.79% in the previous month.”
Total deposits at the CBN for the period amounted to N15.703tr, indicating a 6.5% increase over the level at end-September 2018, a growth “attributed to 13% and 9.5% rise in the deposits of the private sector and Federal Government, respectively.”
The shares of the Federal Government, banks and private sector deposits at the CBN were put at 49.6%, 30.6% and 19.8%, respectively; while reserve money rose by 4.9% to N7.135tr, compared with an increase of 7% in September, a development it said “reflected the increase in total bank reserves.”