This was revealed by the CBN in its Annual Currency Operations Report for 2020. Headline inflation reached 15.8 percent in December 2020, with high currency in circulation possibly playing a role.
It stated that the “Currency-in-Circulation (CIC) increased by 19.06 percent from N2,441.67 billion at the end of December 2019 to N2,907.13 billion at the end of December 2020.” The increase in CIC showed the economy’s ongoing reliance on cash. According to the CIC, a higher proportion was in higher-value bills (N100, N200, N500, and N1000).”
It went on to say that “higher denomination banknotes accounted for 63.47 percent and 98.08 percent of the total CIC, respectively, in terms of volume and value.” As of the end of December 2020, the volume of lower denomination banknotes (N5, N10, N20, N50) accounted for 28.43% of total CIC and 1.92% in terms of value.”
The report stated that “a total of 173,585 boxes of banknotes valued at N980,758 million were processed, compared to 260,651 boxes of banknotes valued at N1,533,729m in 2019.” This indicates a 33.40 percent decrease in the number of boxes or a ₦552,971 million decrease in the value of processed currencies.”
In terms of currency management revenue, it stated that “in 2020, a total of N6,499.91m was generated as income from penal charges on deposits of unsorted banknotes and charges for authentication of foreign currency deposits by DMBs.”
The amount “represented a decrease of N6,743.01m (50.91 percent) compared to N13,242.91 million in 2019.” The drop was attributed to lower deposits by DMBs as a result of restrictions imposed to halt the spread of the COVID-19 epidemic.”