Naira Redesign: Massive cash hoarding resumes

There are indications that Nigerians have resumed cash hoarding following the relaxing of the currency redesign and cashless measures of the Central Bank of Nigeria (CBN).

Vanguard’s findings show that with the policy reversal currency outside banks, (COB) has skyrocketed to N2.08 trillion.

The monetary measures embarked upon by the CBN late last year had tended to mop up such currency and by the time the Federal Government halted the measures in March, COB had gone down to N1.45 trillion from N2.56 trillion at end of December 2022.

The April figure contained in the CBN’s latest Money and Credit Statistics showed that the figure has sharply risen by 43 percent month-on-month to N2.08 trillion from N1.45 trillion.

The data also showed that currency-in-circulation (CIC) rose month-on-month by 42 percent to N2.37 trillion in April from N1.68 trillion in March.

Recall that in December last year, the CBN released the redesigned N200, N500, N1,000 slating January 31st as the deadline for the old notes to cease being legal tender.

The CBN Governor, Godwin Emefiele, said the policy was to, among other things, mop up currency outside banks which stood at N2.83 trillion as at October when the bank made the announcement to redesign the old notes.

The sum of N1.14 trillion was mopped up within five months (October 2022 to February 2023) as currency outside banks fell by 135 percent to N843.3 billion in February.

Currency-in-circulation also fell by 235 percent to N982 billion in February 2023 from N3.29 trillion in October 2022.

In March 2023, the Supreme Court ordered that the N200, N500, N1,000 notes remained legal tender alongside the new notes till December 31st 2023.

This saw a 71.9 percent rise in currency outside the banks to N1.45 trillion in March and N2.08 trillion in April.

Similarly, CIC rose by 71 percent to N1.68 trillion in March and N2.37 trillion in April.