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- Current CBN data shows that money outside the banking system has outpaced currency in circulation
- According to the data, about 93.34% of Nigeria’s currency is in the hands of individuals and businesses
- Analysts say the development defeats the drive for cashless policy and financial inclusion in Nigeria
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Data from the Central Bank of Nigeria (CBN) shows that the total currency in circulation hit N4.14 trillion, with N3.87 trillion currently outside the Nigerian banking system.
The development shows that 93.34% of Nigeria’s currency is in the hands of Nigerians and businesses, while 6.66% is in the banking sector.
Source: Getty Images
The currency in circulation grows
Despite efforts to drive financial inclusion and promote transactions, the development shows continuous challenges for Nigeria’s banking system.
The gap between the currency outside the banks and the total currency in circulation suggests that Nigerians still depend massively on cash for daily transactions.
Also, data from CBN shows that currency in circulation in Nigeria added N1.48 trillion or 55.8% yearly to reach N4.14 trillion in August 2024 from N2.66 trillion in August last year.
The N4.14 trillion in August 2024 increased by 91.08 billion from N4.05 trillion in July.
Monthly breakdown of currency in circulation
An analysis of currency in circulation shows that January began with N3.65 trillion.
The figure indicates a moderate year start, aligning with economic activities after the Christmas holidays.
By February 2024, the amount of currency in circulation declined slightly to N3.69 trillion, representing a growth of 1.18% from the January figure.
March 2024 witnessed a significant increase, with currency in circulation rising to N3.87 trillion, a monthly increase of N175 billion, representing 4.76%.
The trend continued in April, with currency in circulation hitting N3.93 trillion, suggesting continued economic activities and rising consumer spending during Easter.
In May, Nigeria's currency in circulation reached N3.97 trillion, an increase of N42 billion from April this year.
June recorded the highest spike in currency in circulation, at N4.04 trillion, a 2.11% rise from May 2024's N84 billion, and later hit N4.05 trillion in July this year.
ThisDay reports that CBN governor Olayemi Cardoso said during the Monetary Policy Committee (MPC) meeting that the N4 trillion recorded in July as money would spike to N1.4 trillion in another three months to aid cash in the system.
Naira’s spot rate nears N1,700 per dollar
Legit.ng previously reported that currency dealers in the Nigerian Autonomous Foreign Exchange Market (NAFEM) quoted the dollar at a high of N1,691 per dollar and a low of N1,540 on Monday, September 30, 2024.
This comes as the naira reversed its two-day gain in the official window to close at N1,541.94 per dollar from N1,540.78 per dollar it traded on Friday, September 27, 2024.
Data from the FMDQ Exchange shows that the naira’s depreciation on Monday, September 30, 2024, represents 0.08%, following a decline in foreign exchange turnover at $181.86 million.
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Source: Legit.ng
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