Currency in circulation in Nigeria rose by N1.15 trillion in 2021 to N3.33 trillion as of December 2021 its highest level on record. This is on the back of several monetary policies adopted by the Central Bank of Nigeria to increase liquidity in the economy.
Data from the money and credit statistics from the Central Bank of Nigeria. According to the data, Nigeria’s currency in circulation increased by 39.4% in the year compared to N2.91 trillion recorded as of the end of the previous year. The Central Bank maintained a subtle monetary approach to stimulate the economy all through the year.
Specifically, the apex bank maintained the country’s benchmark interest rate (MPR) at 11.5% all through 2021 and has started the new year with the same approach, retaining the cash reserve ratio at 27.5% and liquidity ratio at 30%. A move which paid off as the country’s GDP grew by a record high of 5.01% in Q2 2021.
Credit to private sector hit its highest level in December 2021, reaching N35.73 trillion from N30.15 trillion recorded as of December 2020, representing a N5.58 trillion increase in one year. This could be attributed to a combination of the Central Bank’s policies, innovation in technology and the surge in the number of FinTechs in the lending space.
In the same vein, credit to government also increased by N1.33 trillion in 2021, rising to N13.73 trillion as of December 2021 from N12.4 trillion recorded as of the previous year.
The increase in bank credit is in line with the CBN’s mandate to give the real sector easy access to credit in order to ensure economic stability having suffered from a recession in the previous year during the covid-19 pandemic.