Naira in circulation hits N3.97trn in May

The currency’s value in circulation has risen to N3.97 trillion at the end of May, representing an all-time high and a 1.07 percent increase over the previous month.

The data released on the Central Bank of Nigeria website  indicated that the currency in circulation has been rising consistently over the months from N3.92 trillion in April to N3.86 trillion in March.

The currency in circulation has been increasing month-on-month despite the CBN monetary policy tightening which has seen the benchmark interest rate set at 26.65 percent.

Currency in circulation represents banknotes and coins that have been produced and issued for use in the economy.

According to CBN, currency in circulation at N3.87 trillion in March represented about a 4.76 percent month-on-month increase from N3.69 trillion in February 2024.

Meanwhile, currency outside banks also increased progressively during the first quarter, growing from N3.28 trillion in January to N3.41tn and N3.63 trillion in February and March, respectively.

The data revealed that over 90 percent of currency in circulation is held outside of the banking system, indicating Nigerians are holding more cash.

In their statements, one of the members of the Monetary Policy Committee of the CBN at their March meeting, Muhammad Abdullahi, posited that the apex bank had identified high currency outside banks as one of the monetary drivers of the country’s inflation.