Campaign spending pushes Currency in Circulation to N3.31trn in April

Amid campaign spending, the Central Bank of Nigeria (CBN) has disclosed that currency in circulation increased to N3.31trillion in April 2022, to reached its highest peak.
The apex bank had disclosed that currency in circulation dropped Month-on-Month (MoM) by N4.59billion or 0.14 per cent to N3.25 trillion in March from N3.25 trillion in February 2022.
The apex bank in its Money and Credit Statistics had reported N3.29 trillion in circulation in January 2022.
Nigeria’s currency circulating in the economy has recorded significant growth since the Central Bank maintained its dovish monetary approach as a means to ensure the recovery of the nation’s economy, following the recession recorded in 2020, caused by the covid-19 pandemic.
Several intervention policies pushed currency in circulation to its highest level in history in December 2021.
Analysts noted that politicians spending, among other factor responsible for hike in currency in circulation, stressing that it impact might be felt in increasing inflation.
Finance expert, Mr Rotimi Fakeyejo explained that excess liquidity over political spending has contributed to growth in currency in circulation, stressing that Nigerians are finding it difficult to embrace the cashless policy of the CBN.
According to him: “The market currently is awash with excess liquidity and it is due to season of the year. CBN interventions in the foreign exchange and other key sectors of the nation’s economy are factors contributing to hike in currency in circulation.”
He explained further that Nigeria is still more of a cash economy, facing infrastructure challenges.
“Someone can blame infrastructure deficit to CBN’s good intention of making Nigeria a cashless society. The infrastructure that will make the cashless policy work is missing compared to what we have in Kenya,” he added.