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- The amount of currency in circulation has increased to an all-time high of N4.3 trillion
- Similarly, a report showed that the currency outside of banks increased to N4.02 trillion in September
- More worrisome, according to experts, is the fact that over 95% of the cash in circulation is not now in banks
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
As of August 2024, the Central Bank of Nigeria (CBN) reported that the amount of currency in circulation has increased to an all-time high of N4.3 trillion.
Source: UGC
As the amount of money in circulation increased from N3.86 trillion in August to N4.02 trillion in September, Daily Trust reported that the currency outside of banks is also competing fiercely.
Currency in circulation is the total quantity of money in a nation that is physically utilized for transactions between customers and businesses, whether it be in the form of coins or paper money.
It stands for the amount of money that the nation's monetary authority has issued less the amount of money that has been taken out from the system.
Increased economic activity and expenditure by individuals and businesses are reflected in the increase in the amount of cash in circulation.
This is also a result of the devaluation of the naira and higher revenue received by all levels of government.
Experts say that the fact that more than 95% of the currency in circulation is currently not in banks is more concerning.
Since the start of the year, the amount of currency in circulation has steadily increased, starting with N3.65 trillion in January.
The amount of money in circulation in February was N3.69 trillion, which was a tiny rise of N43 billion or 1.18 percent from the January amount.
In March, it also climbed significantly to N3.87 trillion, and in April, it increased even more to N3.92 trillion.
In May, the currency in circulation increased marginally to N3.97 trillion, up N42 billion or 1.07%, continuing the rising trajectory. It also hit an all-time high of 4.04 trillion, up 2.11% from May.
Additionally, there was a noticeable increase in March to N3.87 trillion, and in April, it rose even more to N3.92 trillion.
In May, the currency in circulation increased marginally to N3.97 trillion, up N42 billion or 1.07 percent, continuing the rising trajectory. It also hit an all-time high of 4.04 trillion, up 2.11 percent from May.
Meanwhile, Legit.ng has reported that Data obtained from FMDQ securities, where naira is officially traded, showed that the Nigerian currency closed at N1,678.87 per dollar on Friday, November 8, 2024.
Friday's exchange rate is 2.4% or N39.37 from the preceding day’s N1,639.50/$1.
The fall of the naira happened despite an improvement in the supply of forex to the spot market during the session.
Money outside banks exceeds currency in circulation
Legit.ng reported that 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.
Despite efforts to drive financial inclusion and promote transactions, the development shows continuous challenges for Nigeria’s banking system.
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Source: Legit.ng
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