The value of currency in circulation in Nigeria reached an all-time high of N3.97 trillion at the end of May, marking a 1.07 percent increase over the previous month.
Data released by the Central Bank of Nigeria (CBN) on Sunday indicated a consistent rise in currency circulation, from N3.92 trillion in April to N3.86 trillion in March.
This increase has persisted despite the CBN’s monetary policy tightening, which has set the benchmark interest rate at 26.65 percent.
Currency in circulation includes all banknotes and coins issued for use in the economy.
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In March, the currency in circulation of N3.87 trillion represented a 4.76 percent month-on-month increase from N3.69 trillion in February 2024.
Additionally, currency outside banks grew from N3.28 trillion in January to N3.41 trillion in February and N3.63 trillion in March.
The data revealed that over 90 percent of the currency in circulation is held outside the banking system, indicating that Nigerians are holding more cash.
Muhammad Abdullahi, a member of the CBN’s Monetary Policy Committee, noted at their March meeting that the high amount of currency outside banks is a significant driver of the country’s inflation
