Credit to the economy grew by five percent to N44.7 trillion in five months, January to May, this year, driven by increased lending to the private sector.
This was as currency outside banks and currency in circulation fell by 7.6 per cent and 4.1 per cent during the same period reflecting the impact of increased usage of electronic payment channels.
The CBN disclosed this in its updated Money and Credit data, which also showed a three per cent growth in current account deposits of banks.
Analysis of the data shows that credit to the economy rose by N2.1 trillion or five per cent to N44.7 trillion in May from N42.6 trillion in December 2020.
The growth was driven by credit to the private sector which shot up by N2.1 trillion or seven per cent during the period to N32.2 trillion in May from N30.1 trillion in December 2020.
Credit to the government however grew marginally by N100 billion or 0.8 per cent during the period to N12.5 trillion in May from N12.4 trillion in December.
Further analysis shows that Currency in Circulation (CIC) and Currency Outside Banks (COB) fell by 4.1 per cent and 7.6 per cent respectively in the five months to May 2021.
According to the CBN, CIC fell by N1.2 trillion to N27.9 trillion in May from N29.7 trillion in December 2020.
Similarly, COB fell by N1.9 trillion to N23 trillion in May from N24.9 trillion in December 2020.
On the contrary, Demand Deposits of banks (current accounts) rose slightly by N400 billion or three per cent to N13.9 trillion in May from N13.5 trillion in December.