CBN Insists There Is Enough Currency in Circulation, Names Those Behind Cash Scarcity
- The Central Bank of Nigeria has revealed that the currency in circulation is sufficient
- The apex bank stated that the currency in circulation is over N3 trillion, and there is no reason for the cash scarcity experienced in some parts of the country
- Nigerians have been urged not to panic about the availability of cash during the festive season
Legit.ng journalist Dave Ibemere has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Central Bank of Nigeria (CBN) said it is currently addressing reported cases of cash scarcity in some parts of the country.
This was disclosed by Hakama Sidi-Ali, the acting director of corporate communications of the CBN, on Wednesday, December 13, 2023.
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According to Sidi-Ali, there is N3.4 trillion cash in circulation in the country, enough to meet Nigerians' daily transactions.
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She, therefore, asked Nigerians not to panic during the festive season.
Her words:
“There is indeed an increase in currency in circulation. From N1 trillion in February 2023, we have seen a rise to over N3.4 trillion as of December 11, 2023.
"This demonstrates that enough cash is available, but unfortunately, it’s not circulating due to apprehension among some individuals.”
Regarding the difficulties Nigerians have faced in past and present cash shortages, Sidi-Ali expressed the CBN's dedication to resolving the matter.
She said:
“We empathise with the recent and past experiences of Nigerians. The CBN assures everyone that we have adequate cash to meet daily transaction needs, even during the upcoming festive season.”
CBN names those behind naira scarcity
Speaking further, Sidi-Ali named hoarders as the reason for the cash scarcity.
She noted that many of the hoarders are worried due to the challenges experienced during the Naira redesign project.
She noted:
“The CBN was monitoring the situation and had released sufficient cash to its branches across the country for onward distribution to Deposit Money Banks (DMBs).”
Ali also urged Nigerians to exercise patience while the CBN implements measures to ensure wider cash availability.
CBN spokesperson added:
"This includes ongoing efforts to improve cash distribution channels and address logistical challenges."
Expert gives new perspective
In response to the cash scarcity, Prof Uche Uwaleke, President of the Association of Capital Market Academics of Nigeria (ACMAN), suggested that the current cash shortage could be a result of the actions taken by the CBN.
He noted that the CBN is concerned about the increasing amount of cash in circulation, as it could impact its monetary policy, prompting the reduction in the supply of cash to deposit money banks.
His words:
"I spoke to managers of some banks, and they told me that the CBN is not supplying enough cash to them as it used to.
"That is why many banks have imposed withdrawal limits. On the other hand, deposits are not coming in, and people are hoarding cash due to fear of the old naira notes.
"These are the major reasons for the cash scarcity. The CBN is not printing new notes, and Nigerians are hoarding cash."
CBN orders banks to restrict accounts without BVN, NIN
In another development, Legit.ng reported that the CBN directed that all funded accounts without a Bank Verification Number and National Identification Number be restricted.
This was disclosed in a circular to all commercial, merchant, non-interest and payment service banks and other financial institutions and mobile money operators.
The December 1, 2023 circular, which applies to all institutions regulated by the CBN, ordered banks to place a "Post No Debit or Credit" on any unfunded account.
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Source: Legit.ng
