CBN Refutes Cash Scarcity Concerns, Attributes Situation to Panic Withdrawals

In light of rising public concerns regarding a perceived cash shortage in Nigeria, the Central Bank of Nigeria (CBN) and its spokesperson Isa AbdulMumin, the Director of Corporate Communications, have taken steps to address these worries. On Thursday, AbdulMumin explained that the noticeable cash shortages in major Nigerian cities stem from high transaction volumes by Deposit Money Banks (DMBs) and panic-driven withdrawals by customers, rather than a genuine scarcity of cash.

The CBN has reassured the public that it possesses sufficient cash reserves to meet the needs of all economic activities, despite reports indicating cash shortages at banks, ATMs, retail locations, Bureau de Change (BDCs), and Points of Sale (PoS) throughout the country. The bank attributes this perceived shortage to the increased number of ATM withdrawals by customers and the high volume of withdrawals made by DMBs from CBN offices.

While the CBN recognizes these challenges, it insists that there is an adequate cash supply available for financial transactions across the nation. The bank’s branches are actively working to facilitate smooth cash circulation throughout the country. This statement comes amid concerns surrounding a 41.65% increase in external debt service payments to $439.06 million and the initiation of a $10 billion clearance for Forex backlogs. Despite these issues and a daily limit of ₦50,000 on contactless payment methods, the CBN continues to assure the public of stable cash flow.

AbdulMumin further urged people to avoid panic withdrawals and to consider alternative payment methods to lessen the reliance on physical cash. He emphasized that the CBN’s substantial cash reserves will support economic operations and refuted claims of currency shortages circulating in various forums. He confirmed that there is enough cash available for economic activities, underlining the CBN’s commitment to maintaining stability in Nigeria’s financial environment.