Despite the scarcity of cash in the country, the cash outside the banking system rose significantly by more than 41 per cent between January and November this year as the currency in circulation also rose.
According to data by the Central Bank of Nigeria (CBN), total currency in circulation in the country stood at N4.878 trillion in November, a 33.6 per cent increase compared to N3.65 trillion which was in circulation in January.
The currency outside the banking industry rose by 41.79 per cent to N4.652 trillion in November compared to N3.281 trillion in January. On a month-on-month basis, the currency in circulation had risen by 7.2 per cent from N4.549 trillion in October to N4.878 trillion in November.
Currency outside banks had risen by 8.5 per cent to N4.652 trillion in November from N4.288 trillion in October. The percentage of total currency in circulation that is outside the banking industry also rose by 5.5 percentage points.
In January this year, 89.89 per cent of the currency in circulation was outside the banking industry, but by November, the percentage of the currency outside banks had increased to 95.36 per cent. Availability of cash in the banking halls and automated teller machines (ATMs) had pushed many Nigerians into the hands of banking agents popularly known as Point of Sale (POS) operators.
This is despite the warnings by the CBN governor to sanction banks that fail to make cash readily available to customers both in the banking halls and ATM, availability of cash still remains a challenge for many.
Meanwhile banking industry credit to the government had risen by 68.45 per cent while credit to the private sector declined marginally by 0.68 per cent. Compared to N23.518 trillion credit to the government in January, the amount rose to N39.616 trillion in November, having declined to N19 trillion in the course of the year.
Meanwhile credit to the private sector declined from N76.479 trillion in January to N75.479 trillion in November having risen as high as N80 trillion in February this year. The decline in credit to the private sector could be due to higher interest rates as the benchmark interest rate had been raised by the Monetary Policy Committee in the course of the year by 8.75 percentage points.
Monetary Policy Rate (MPR), which is the benchmark interest rate, had been raised consecutively in the course of the year from 18.75 per cent to 27.5 per cent.
