The volume of raw cash in circulation dropped significantly in January as the cash-lite policy of the Central Bank of Nigeria continued to gain ground. At N1.457 trillion, currency in circulation fell by 10.7 per cent value in the review month, in contrast to an increase of 4.2 per cent value at the end of December 2012.
The development reflected, according to the January Economic report of the CBN, 11.2 per cent value decline in amount of currency outside banks. Total deposits at the CBN amounted to N6.787 trillion, indicating a decline of 7.7 per cent below the level as at last year December. The development reflected, largely, the fall in Federal Government and deposit money banks’ (DMBs) deposits, which more than offset the increase in deposits by “others”.
Of the total deposits, the percentage shares of the Federal Government, banks and “others” were 63.4, 26.2 and 10.4 per cent, respectively. Also total foreign net assets of the banking system rose by 2.2 per cent at the end of January to N9.302 trillion compared with the increase of 27.5 and 3.9 per cent at the end of the preceding month and the corresponding period of 2012, respectively.
The apex bank attributed the development to the 2.6 per cent increase in the CBN’s holdings of foreign assets. Other assets (net) of the banking system, on a month on month basis, fell by 8.7 per cent to negative N8.615 trillion, compared with 5.4 and 2.1 per cent decline at the end of the preceding month and the corresponding period of 2012, respectively. This reflected the fall in unclassified assets of both the CBN and the DMBs.
Aggregate banking system credit to the domestic economy in the first month of 2012 stood at N14.482 trillion, a 3.8 per cent increase on month-on-month basis, as against the growth of 1.9 and 2.0 per cent at the end of the preceding month and corresponding period of 2012, respectively.