Amid the reported high currency in circulation, which hit a record high of N4.05 trillion in July, the Central Bank of Nigeria (CBN) says it will pump another N1.4 trillion into the system In the next three months. The move according to the bank is to improve cash flow within the banking system.
There has been reported cases of cash scarcity, with the CBN and commercial banks pointing accusing fingers at each other.
Some of the banks are said not to be currently dispensing cash to customers, triggering widespread frustration and scarcity concerns.
CBN Governor, Olayemi Cardoso, during a press briefing at the end of the 297th Monetary Policy Committee (MPC) meeting in Abuja, while warning the banks against hoarding cash, which he said will attract severe consequences, noted that the additional cash to be released into the system, is aimed at ensuring sufficient cash availability in ATMs and across bank branches, addressing the challenges of cash insufficiency that many customers have faced.
He said: “Another N1.4 trillion is likely to be delivered in another three months to aid that whole process of cash within the system and cash velocity.
“So, from our perspective, we are doing everything possible to ensure that there is sufficient cash in the system. There is no excuse for not having sufficient cash in the system.
“Now it goes to the deployment of that cash and quite frankly, we are working very, very closely. We are engaging with all the deposit money banks to ensure that they are putting these things through their ATMs, effectively dispensing cash to those that are in need.
“And whether they are in need or not, that is the function of the deposit money banks. And at all points in time, there should be sufficient cash in their system that nobody should go there without being able to withdraw.”
The CBN had earlier reported that the amount of currency outside the banking system in Nigeria decreased to N3.66 trillion in July 2024, marking the second decline this year.
This represents a reduction of 3.32 percent (or N130 billion) from the previous month’s figure of N3.79 trillion, highlighting the CBN’s ongoing efforts aimed at tightening liquidity and encouraging deposits into the formal banking sector.
The decrease is larger than the 0.62 per cent (N20 billion) fall recorded between March and April when it dropped from N3.63 trillion to N3.61 trillion.
Despite the decrease in currency outside the banks, the currency in circulation saw a marginal increase from N4.04 trillion in June to N4.05 trillion in July, a growth of just 0.12 per cent.