The aggregate money supply out of the banking system and which circulated within the Nigeria economy stood at N5 billion during 1987 latest statistics made available by Central Bank has shown.
According to the statistics, money in form or demand deposit that was supplied to the banking system in current account within the banks in the country was N7 billion giving a total of N12 billion s deseasonalised money supply in the Nigeria economy.
This compares with about some amount that was outside and within the banking system for the financial year 1986.
A breakdown of the money supplied for the year 1987 showed that in January and February the money outside the banking system was slightly below N5 billion but rose to the same N5 billion for the month of March, May and June and July ad August. The same amount was recorded for the month of September, October and November.
Money supply that was within the banking system rotate between N8 billion and N7.5 billion for between January and November.
The month of March recorded a peak money supply of both currency outside banks and demand deposit giving a total deseasonalised money supply of about N13 billion.
The amount is demand deposits however fell from its N7 billion to N6.4 billion between the month of May and August. The total deseasonalised money supply fell as a result of about N11 billion indicative of the credit squeeze in the economy. Monetary economist who spoke to The Republic on the issue expressed concern over the huge amount of currency outside the banking system.
According to them amount suggest that a large proportion of money supplied to the economy is handed, thereby curtailing the multiplier effect the circulation of such currencies would have had on the economy.
They also argued that hoarding money or keeping it outside the banking system deprives the economy of inevitable funds