The amount of money in circulation in Nigeria has reached N3.87 trillion by the end of March, as per data from the Central Bank of Nigeria. This is an increase from N3.69 trillion in February and N3.65 trillion in January. Notably, the currency outside of banks has also risen steadily during the first quarter, indicating that Nigerians are holding more cash.
Over 90% of the currency in circulation is held outside of the banking system, suggesting a preference for cash among Nigerians. This trend has raised concerns, with some experts linking high currency outside banks to the country’s inflation.
Muhammad Abdullahi, a member of the Monetary Policy Committee of the CBN, highlighted the need to address monetary drivers such as money supply growth and exchange rate depreciation to mitigate inflationary pressure.
The rise in currency in circulation reflects both economic activities and possibly a lack of confidence in other forms of investment. The Central Bank of Nigeria aims to manage this increase effectively to ensure stability in the economy and control inflation.
Source: Business Day