How CBN know the accurate money in circulation

Nairaexchange

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How does the Central Bank of Nigeria know the accurate amount of currency in circulation (CIC) and how correct is the information on the site concerning currency in circulation?


Currency in circulation can be defined as ‘currency outside the vaults of Central Bank, that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks. The Central Bank of Nigeria employs what is referred to as the "accounting/statistical/withdrawals & deposits approach" to compute the CIC in Nigeria. This approach involves tracking the movements in CIC on a transaction by transaction basis. That is, for every withdrawal made by a DMB 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 is in CIC is recorded. The transactions listed above are all recorded in the Central Bank’s Currency In Circulation account, and the balance on the account at any point in time represents the country’s Currency in Circulation. The accuracy of the CIC figure reported on the Bank’s website is a function of the postings made into the CIC account of the Bank at the 37 Branches across the country. The Bank however operates a robust reconciliation/call-over system which serves to highlight erroneous or non-impacted postings made into the CIC account in order to have them resolved within the shortest possible time. This ensures that the CIC figure reported by the Bank at any point is free from material error.

 
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