Currency in circulation rose by N56.44bn in one month from N2.369tn as of the end of August to N2.426tn as of the end of September.
Figures obtained from the Central Bank of Nigeria on Wednesday stated.
The figure, which stood at N2.35tn as of the end of May, rose to N2.39tn as of the end of July.
The currency-in-circulation on quarter-on-quarter basis fell by 6.0 per cent to N2.29tn at the end of March 2020, compared with a decline of 7.5 per cent at the end of the first quarter of 2019.
According to the CBN’s monthly economic report for May, extensive cash reserve ratio debits on banks that failed to comply with policy directives increased the monetary authority’s liabilities to other depository corporations and increased reserve money in May 2020.
Reserve money grew by 5.9 per cent to N12.96tn compared with a growth of 20.7 per cent in April 2020.
It said that at N10.61tn, liabilities to other depository corporations surged 70.5 per cent above the preceding month’s growth rate of 59.7 per cent.
The report said, “The heightened uncertain outlook due to the lockdown encouraged more cash to be held by the public.
“This was evident from the increase in currency in circulation, compared with the level in the preceding month.
“Currency in circulation rose by two per cent to N2.35tn at the end of May 2020, compared with the increase of 0.5 per cent at the end of April 2020.”
According to the CBN, currency in circulation is defined as a currency outside the vaults of Central Bank; meaning all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks.
The CBN stated that it employed the “accounting/statistical/withdrawals and deposits approach” to compute the currency in circulation in Nigeria.
It added that the approach involved tracking the movements in currency in circulation on a transaction by transaction basis.
According to CBN, this means for every withdrawal made by a Deposit Money Bank at one of CBN’s branches, an increase in CIC is recorded, and for every deposit made by a DMB at one of CBN’s branches, a decrease in CIC is recorded.