CBN to pump N1.4tr into circulation
01 October 2024 |
12:31 am
Amid the reported high currency in circulation, which hit a record 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 to improve cash flow within the banking system.
Amid the reported high currency in circulation, which hit a record 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 to improve cash flow within the banking system.
There had been reported cases of cash shortage, with the CBN and commercial banks trading blames. Some of the banks are said not to be dispensing cash to customers, triggering widespread frustration.
During a briefing at the end of the 297th Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor, Olayemi Cardoso, while warning the banks against hoarding cash, which he said would attract severe sanctions, noted that the additional cash to be released into the system was to ensure sufficient cash availability in Automated Teller Machines (ATMs) and across bank branches, addressing the challenges of cash insufficiency that many customers face.
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 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 closely. We are engaging with all the Deposit Money Banks (DMBs) to ensure they put these things through their ATMs, effectively dispensing cash to those in need.”
According to Cardoso, whether they are in need or not, is the function of DMBs. “At every point 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 per cent (N130 billion) from the previous month’s figure of N3.79 trillion, highlighting the CBN’s ongoing efforts to tighten liquidity and encourage 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.
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