Nigeria’s appetite for physical cash has surged once again, with Currency Outside Banks (COB) rising to N4.65 trillion in October, marking the second consecutive month of growth. The increase reflects a renewed demand for cash among households and businesses, even as the Central Bank of Nigeria (CBN) continues to tighten monetary policy to control inflation.
According to the latest CBN Money and Credit Statistics, COB grew by 4.07 per cent in October, adding N181.71 billion to September’s N4.47 trillion. This follows a modest September uptick of N14.73 billion after a decline of N43.44 billion between June and August, highlighting the volatility in Nigeria’s cash circulation over the past months.
Currency in Circulation (CIC), which tracks the total money physically circulating in the economy, also rose to N5.06 trillion in October — a 2.12 per cent increase from September’s N4.95 trillion. Despite these monthly fluctuations, CIC has remained around the N5 trillion mark since the beginning of 2025, demonstrating the sustained preference for cash among Nigerians.
Credit to the private sector saw a 2.60 per cent rise to N74.41 trillion in October, up from N72.53 trillion in September, signaling growing business and household borrowing. However, compared to October 2024, private sector credit barely changed, dropping slightly by 0.46 per cent, while government borrowing climbed to N24.79 trillion, up 2.61 per cent month-on-month but down 37.07 per cent year-on-year.
Economists warn that the rising preference for cash outside banks could pose challenges for monetary control, deposit mobilization, and inflation management. While the CBN’s Monetary Policy Committee reduced the Monetary Policy Rate to 27 per cent in September, easing liquidity, November’s meeting saw the rate held steady, reflecting cautious steps to balance cash demand with broader inflation targets.
source: Leadership