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Currency-in-circulation drops to N1.534trillion

By BusinessNews Staff on December 31, 2014

The Central Bank of Nigeria (CBN) has disclosed that currency-in-circulation declined by 0.9 per cent on month-on-month basis to N1.534 trillion in October.
This is in contrast to the growth of 3.1 per cent recorded at the end of the preceding month. The development, relative to the preceding month, according to the CBN economic report, reflected largely, the 4.6 per cent fall in its currency outside bank component.

Also, total deposits at the CBN at the end of the review month amounted to N6.962 trillion, indicating an increase of 4.2 per cent above the level at the end of the preceding month.
“The development reflected largely, the 13.9 and 6.3 per cent rise in deposits of ‘Others’ and banks respectively. Of the total deposits, the percentage shares of the banks, federal government and ‘others’ were 50.9, 44.2 and 4.9 per cent, respectively.

“Available data indicated that money market rates were relatively stable during the review period. The banking system was awash with liquidity surfeit, occasioned by maturing CBN bills, Cash Reserve Requirement (CRR) credit posting for the maintenance period, Joint Venture Cash (JVC) call and fiscal injections through statutory revenue released to the three tiers of government.

“CBN bills of diverse tenors were floated at the Open Market Operations (OMO) segment to mop up the liquidity surfeit in the system. In the review month, Standing Deposit Facility (SDF) was more predominant as there was liquidity surfeit in the banking system,” it explained.

The provisional data also indicated that the total value of money market assets outstanding in October 2014 stood at N7.536 trillion. This represented an increase of 2.2 per cent over the level in the preceding month. Also, the development reflected the 1.8 and 2.7 per cent increase in outstanding FGN bonds and treasury bills, respectively.

“Available data indicated mixed developments in banks deposit and lending rates during the review month. The 7-day and 12 months deposit rates fell from 4.54 and 9.31 per cent to 4.43 and 9.23 per cent respectively, while the average savings deposit rate remained at 3.43 per cent, same rate as in the preceding month.

“However, all other deposit rates of various maturities rose from a range of 8.41 – 9.72 per cent in the preceding month to a range of 8.52– 9.88 per cent.

“At 8.48 per cent, the average term deposit rate rose by 0.02 per cent point above the level in the preceding month. The average prime lending rate rose by 0.04 percentage point to 16.48 per cent during the review month. However, the average maximum lending rate, at 25.75 per cent, declined by 0.02 percentage point below its level in the preceding month,” it added.

Consequently, the spread between the weighted average term deposit and maximum lending rates narrowed by 0.04 to 17.27 percentage points, while the margin between the average savings deposit and maximum lending rates narrowed.

At the interbank call segment, the weighted average rate, which stood at 10.73 per cent in the preceding month, increased to 10.98 per cent in October 2014.

[ThisDay]

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