Naira notes
Obinna Chima
The Central Bank of Nigeria (CBN) has said the total value of currency-in circulation fell slightly by 0.7 per cent to N1.422 trillion as at April this year, as against the N1.412 trillion it was the previous month.
The apex bank, which disclosed this in its economic report for April, said the development reflected, wholly, the 2.7 per cent decline in currency outside banks.
It also showed that relative to end-December 2011, currency in circulation fell by 9.2 per cent.
It said: “Total deposits at the CBN amounted to N5.986 trillion, indicating an increase of 7.1 per cent above the level at the end of the preceding month. The development reflected, largely, the increases in all its components, namely Deposit Money Banks (DMBs), “others” and federal government deposits.
“Of the total deposits, the percentage shares of the federal government, banks and “others” were 69.7, 19.5 and 10.8 per cent, respectively, compared with 70, 20 and 10 per cent in the preceding month. The reserve money (RM) rose by 2.5 per cent to N2.58 trillion at the end of the review month, reflecting the trends in DMBs’ deposits with the CBN.”
According to the report, the money market experienced liquidity ease in April 2012 following the release of statutory revenue allocation and repayment of matured bills. Consequently, there was intervention in the money market, through sale of Nigerian Treasury Bills (NTBs) of various maturities and repurchase transactions to stabilize the market.
“Besides, FGN Bonds were issued at the primary market for fiscal operations of the Federal Government. The restrictive monetary policy stance helped to stabilize the market as money market rates moved around the upper limit of the Monetary Policy Rate (MPR) corridor, while yields on fixed income securities remained real and attractive for Foreign Direct Investment (FDI) inflows.
“The value of Commercial Paper (CP) held by the DMBs at end-April 2012 fell by 5.6 per cent to N184.9 billion, compared with the decline of 5.3 per cent at end- March 2012. Thus, CP constituted 3.2 per cent of the total value of money market assets outstanding at end-April 2012, compared with 3.4 per cent at the end of the preceding month,” the report said further.
Continuing, it stated that the value of Bankers’ Acceptances (BAs) declined by 28.9 per cent to N20.2 billion, compared with the decline of 25.5 per cent in the preceding month. The development in Bas, it said, reflected the fall in investments by deposit money banks and discount houses.