Currency in circulation in the country dropped by N70bn to N2.83tn in January from N2.9tn as of December 2020.
According to the CBN, currency in circulation rose from N2.5tn as of the end of October to N2.66tn as of the end of November.
The banking regulator stated in its November monthly economic report that currency outside depository corporations, transferrable deposits, and other deposits largely propelled growth in monetary liabilities at the end of the review period.
It stated that securities other than shares plummeted by 28.9 per cent, attributable to the low demand for CBN bills due to relatively low yields.
Narrow money supply (M1) expanded by 9.3 per cent, compared with the 10.3 per cent growth at the end of the second quarter of 2020.
The growth in M1 was due to the eight per cent and 9.5 per cent increases in currency outside depositary corporations and transferable deposits respectively, reflecting demand for transaction balances, amidst macroeconomic uncertainties surrounding the COVID-19 pandemic.
The banking regulator stated that net foreign assets and domestic claims grew by 27.5 per cent and 7.4 per cent respectively and contributed 4.7 percentage points and 7.8 percentage points to the growth in M3, at end-September 2020; compared with 6.9 percentage points and five percentage points at end-June 2020.