Currency in Circulation Hits N5.01 Trillion in May as Cash Outside Banks Grows to N4.63 Trillion

Currency in circulation (CIC) in Nigeria rose slightly to N5.015 trillion in May 2025 from N5.003 trillion in April, according to new data from the Central Bank of Nigeria (CBN). This 0.24 percent increase suggests a continued build-up of liquidity in the economy, despite the CBN’s efforts to implement tighter monetary policies aimed at reducing inflation and curbing excess cash flow.

More significantly, the volume of currency held outside the formal banking sector also increased. From N4.57 trillion in April, cash outside banks climbed to N4.63 trillion in May, reflecting a 1.38 percent rise. This means 92.4 percent of total currency in circulation was not within deposit-taking institutions, up from 91.3 percent the previous month.

A year-on-year comparison underscores this upward trend. In May 2024, CIC was N3.97 trillion, of which N3.71 trillion was outside the banks. The May 2025 data marks a 26.2 percent annual increase in total CIC and a 24.8 percent rise in out-of-bank cash, pointing to increasing public reliance on physical cash over banking channels.

Looking back over the past year, physical currency in the Nigerian economy has consistently expanded. From June to December 2024, CIC grew each month, peaking in December at N5.44 trillion. While the early months of 2025 showed slight declines, May’s figures suggest a renewed upward trend.

This persistent rise in physical currency, especially outside the banking system, raises concerns for policymakers. It may undermine financial inclusion goals and complicate efforts to manage inflation and implement digital or cashless economy initiatives. The CBN’s future actions will likely focus on addressing these challenges through more aggressive monetary tightening or financial reforms.

Source: This day