Currency in Circulation Hits Record High of N5.24trn, Now 90.4% of Cash Outside Banks
CHIGOZIE AMADI
The total currency in circulation in Nigeria surged to an all-time high of N5.24 trillion in January 2025, marking a 43.5 per cent increase from N3.65 trillion in January 2024, according to newly released data from the Central Bank of Nigeria (CBN).
Analysis of the CBN data showed that a significant portion of the N5.24 trillion, N4.74 trillion, or 90.4 per cent, was held outside the banking system, reflecting the continued dominance of cash transactions.
Compared to the same period last year, currency outside banks rose by 44.5 per cent, from N3.28 trillion in January 2024 to N4.74 trillion in January 2025.
The data shows a steady increase in both total currency in circulation and cash held outside banks over the past year. At the beginning of 2024, currency in circulation stood at N3.65 trillion, with N3.28 trillion, 89.9 per cent outside banks. By February, total currency rose to N3.69 trillion, with N3.41 trillion which was 92.5 per cent outside the banking system. March saw an accelerated rise, with N3.87 trillion in circulation and N3.63 trillion held outside banks.
April marked a slight decline in the proportion of cash held outside banks, with N3.61 trillion or (92 per cent out of the N3.92 trillion total currency in circulation. However, this trend reversed in May, when currency in circulation increased to N3.97 trillion, with N3.71 trillion outside banks. The upward trajectory continued in June, reaching N4.05 trillion, maintaining the 93.5 per cent share of cash held outside the formal banking system.
By July, there was a temporary decline, as currency outside banks dipped to N3.67 trillion, 90.6 per cent, while total currency remained at N4.05 trillion. This shift was short-lived, as August recorded an increase in both metrics, with currency in circulation growing to N4.14 trillion and N3.87 trillion held outside banks. September continued the trend, with total currency reaching N4.31 trillion, while N4.02 trillion remained outside banks.
October saw a further rise, with currency in circulation climbing to N4.55 trillion, of which N4.29 trillion was held outside banks. By November, circulation had surged to N4.88 trillion, with N4.65 trillion outside banks, marking the highest proportion of currency held outside the banking sector in 2024. The figures for December are yet to be posted before hitting a new peak in January 2025, with N5.24 trillion in circulation and N4.74 trillion 90.4 per cent outside banks.
