Nigeria’s currency-in-circulation on month-on-month basis as at the end of May 2019, stood at N2.11 trillion. This is according to the Central Bank of Nigeria (CBN).
Relative to the preceding month, the N2.16 trillion reflected a decrease in the demand deposit component, as it declined by 2.31%.
Breakdown: Currency-in-circulation dropped by 4.46% – from N2.24 trillion in December 2018 to N2.14 trillion in January 2019.
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In February 2019, it rose by 4.67% – from N2.14 trillion in January to N2.24 trillion. Thereafter, it dropped in March by 4.02%, from N2.24 trillion in February to N2.15 trillion.
In April, the currency-in-circulation rose by 0.47% – from N2.15 trillion in March to N2.16 trillion. It further declined by 2.31% as the figure stood at N2.11 trillion in May.
Note that between December 2018 and May 2019, the total money declined by 6%.
What you should know: Money-in-circulation is the total money supply of a country, which can be defined in various ways but always including currency and some types of bank deposits.
Going by the fact that circulation is the continuing use of individual units of a currency for transactions, currency-in-circulation is the total value of the currency that has ever been issued, minus the amount that has been removed from the economy by the Central Bank.
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What this means: The currency-in-circulation condition may be a move by the Central Bank to control inflation. Although inflation dropped by 0.18 points in June 2019, the CBN had disclosed that Nigeria’s economy would continue to witness double-digit inflation throughout 2019.
According to the CBN, Nigeria’s economy is expected to remain weak, peaking at 2.27% while inflation is expected at 11.37%. The CBN, however, revealed that the reason for the forecast of double-digit inflation was traceable to the escalating global economic events.
Bottom line: Analysts have opined that single-digit inflation is in insight after the economy recorded the slowest inflation in almost 11 months. The latest projection by the CBN suggests, among other things, that the slow momentum recorded in the first quarter of 2019 will still be maintained for now.
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