The Central Bank of Nigeria (CBN) has reported that the currency in circulation reached an all-time high of N4.8 trillion as of November 2024. This marks a significant 7% increase from the N4.5 trillion recorded in October.
Data from the CBN reveals that currency outside banks also surged, rising from N4.2 trillion in October to a record-breaking N4.6 trillion in November. This reflects an increasing preference among Nigerians to hold cash outside the banking system.
Currency in circulation, which represents the physical cash used for transactions between consumers and businesses, has grown consistently throughout 2024. Starting the year at N3.65 trillion in January, over one trillion naira was added to the cash in circulation by November.
The trend has been attributed to Nigeria's expanding money supply, which economist Dr. Paul Alaje links to inflationary pressures. Speaking on the matter, Alaje explained, “Money supply is expanding, but this is an offshoot of the CBN’s devaluation policy. While efforts are being made to manage the supply, inflation remains a major challenge.”
Meanwhile, Nigerians continue to face cash shortages, with daily withdrawal limits at ATMs capped at N20,000 per account holder. The CBN has maintained that these restrictions are necessary to manage liquidity and stabilize the financial system.
Despite these challenges, the CBN assures Nigerians that the banking system remains stable and secure. It emphasized that funds held in Nigerian financial institutions are safe, urging citizens to carry on with their banking activities without panic.
The growing reliance on physical cash highlights the struggles many Nigerians face in accessing formal banking systems, signaling the need for further reforms to address economic and financial challenges in 2025.
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