Money in Circulation Shrinks to N.5Tr

The total value of that currency (whether banknotes, coins, or demand deposits) that is engaged in Nigeria’s economy is N1.457 trillion as at the month of January, according to  data by the Central Bank of Nigeria (CBN).

The figure is down fell by 10.7 per cent compared with the 4.2 per cent rise in December last year.

“The development reflected, wholly, the 11.2 per cent decline in currency outside banks,” according to the CBN Monthly Economic for January, which put total deposits at the CBN at N6.787 trillion, a 7.7 per cent slide below the level at the end of the preceding month.

The development significantly reflected the fall in Federal Government and bank deposits, which more than offset the increase in deposits by “others”.

Also, the apex bank’s Economic Report for October 2012 showed that the growth in the key monetary aggregate was modest at the end of October 2012
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On month on- month basis, broad money (M2) rose by 2.4 per cent, due largely to the increase in foreign assets (net) and other assets (net) of the banking system, respectively.

Narrow money (M1) grew by 2.3 per cent, compared with the level at the end of the preceding month.

Relative to the level at end-December 2011, M2, grew by 8.2 per cent, owing, largely, to the increase in foreign assets (net) of the banking system .

Reserve money (RM) fell by 2.5 per cent below its level in the preceding month.

Available data indicated mixed developments in banks’ deposit and lending rates in October 2012
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The average prime lending rate rose while average maximum lending rate fell.

The spread between the weighted average term deposit and maximum lending rates widened from17.28 per cent to 17. 45 per cent in  October 2012

Similarly, the margin between the average savings deposit and maximum lending rates widened to 22.91 percentage point s in the review month from 22.89 per cent in the preceding month.