Currency outside banks in Nigeria surged to N4.29 trillion in October 2024, accounting for 94.2% of the total currency in circulation, according to Central Bank of Nigeria (CBN) data. This marks a significant increase from N4.02 trillion in September and a 30.6% rise since January. The total currency in circulation also climbed to N4.55 trillion in October, reflecting broader cash management trends in the country.
Throughout 2024, the proportion of currency held outside banks steadily increased, rising from 89.9% in January to 94.2% in October. Monthly fluctuations in currency flow highlight a growing reliance on cash outside the formal banking system, despite periodic dips such as in April and July. By contrast, months like March and September recorded significant spikes in cash outside banks, emphasizing shifting preferences for liquidity.
The trend reflects a consistent pattern of increased cash-based transactions, with currency outside banks growing faster than total circulation. October’s peak is the latest development in a year characterized by heightened reliance on informal cash holdings, raising questions about the effectiveness of banking policies aimed at curbing cash-based economies.