Naira Notes In Circulation Hits ₦3.97 Trillion In May

The Central Bank of Nigeria (CBN) has disclosed that the value of Naira notes, the country’s currency currently in circulation, reached a record high of ₦3.97 trillion at the end of May, marking a 1.07% increase compared to the previous month.

This consistent rise in currency in circulation has been observed over the past few months, with the figures increasing to ₦3.92tn in April from ₦3.86tn in March, according to data released by the Central Bank of Nigeria.

Despite the tightening of the CBN’s monetary policy, which includes a benchmark interest rate of 26.65%, the currency in circulation has continued to grow month-on-month.

Currency in circulation refers to Naira notes and coins that have been produced and issued for use in the economy.

The apex bank reported that in March this year, the currency in circulation at ₦3.87tn represented a 4.76% increase from ₦3.69tn in February 2024.

Additionally, the amount of currency held outside of banks also increased during the first quarter, rising from ₦3.28tn in January to ₦3.41tn and ₦3.63tn in February and March, respectively.

This data indicates that over 90% of the currency in circulation is held outside of the banking system, suggesting that Nigerians are holding more cash.

During the March meeting of the Monetary Policy Committee, Muhammad Abdullahi, one of the committee members, highlighted the high amount of currency held outside of banks as one of the factors contributing to the country’s inflation.