Currency in circulation has risen to N3.97 trillion at the end of May 2024, representing a 1.07 per cent increase over the previous month.
The CBN also reported that the money supply as of April 2024 hit N96.97 trillion.
The data updated on the Central Bank of Nigeria website indicated that the currency in circulation has been rising consistently over the months from N3.87 trillion in March to N3.92 trillion in April.
Currency in circulation represents banknotes and coins that have been produced and issued for use in the economy.
According to CBN, currency in circulation at N3.87 trillion in March represented about a 4.76 per cent month-on-month increase from N3.69 trillion in February 2024.
The apex bank also reported that currency outside banks also increased progressively during the first quarter, growing from N3.28 trillion in January to N3.41 trillion and N3.63 trillion 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.
Broad money surged to a new peak of N96.97 trillion in April 2024, reflecting a significant recovery from the previous decline recorded in March.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, believes that the volume of money in circulation is not a problem considering the amount of money supply.
According to him, “N3.97 trillion in circulation is not much compared to the N96.97 trillion money supply. Even the amount outside the banking system is still small compared to what is in the bank.”
He said part of the reason people are keeping money outside the bank could be lack of access to banking services, insecurity and corruption.
“You know when people give bribes they don’t pay through the bank. So they rather keep the cash outside the bank,” he said.
