The currency’s value in circulation has risen to N3.97tn at the end of May, representing an all-time high and a 1.07 per cent increase over the previous month. The data released on the Central Bank of Nigeria (CBN) website on Sunday indicated that the currency in circulation has been rising consistently over the months, from N3.92tn in April to N3.86tn in March.
The currency in circulation has been increasing month-on-month despite the CBN’s monetary policy tightening, which has seen the benchmark interest rate set at 26.65 per cent. Currency in circulation represents banknotes and coins that have been produced and issued for use in the economy.
According to the CBN, currency in circulation at N3.87tn in March represented about a 4.76 per cent month-on-month increase from N3.69tn in February 2024. Meanwhile, currency outside banks also increased progressively during the first quarter, growing from N3.28tn in January to N3.41tn and N3.63tn in February and March, respectively.
The data revealed that over 90 per cent of currency in circulation is held outside of the banking system, indicating Nigerians are holding more cash. One of the members of the Monetary Policy Committee of the CBN at their March meeting, Muhammad Abdullahi, posited that the apex bank had identified high currency outside banks as one of the monetary drivers of the country’s inflation.
