In July, the amount of currency held outside Nigeria’s banking system decreased to N3.66 trillion, reflecting a 3.32 percent decline from the previous month. This data, provided by the Central Bank of Nigeria (CBN) on its website, indicates a drop in currency outside banks to 90.39 percent of the total currency in circulation, down from 93.59 percent in June 2024.
The total value of currency in circulation saw a slight increase, rising to N4.05 trillion in July from N4.04 trillion in June. This marks an 11.05 percent increase in money circulation from the beginning of the year, compared to a 56.17 percent rise in the same period of 2023.
The Central Bank of Nigeria’s Monetary Policy Committee has attributed the rising inflation rates to the excess cash circulating in the economy. In response to this, the CBN has adopted a stringent monetary policy stance. At the July 2024 Monetary Policy Committee meeting, the CBN raised the Monetary Policy Rate (MPR) by 50 basis points to 26.75 percent, up from 26.25 percent in June.
In addition, the broad measure of money supply (M3) reached N106.27 trillion in July 2024, reflecting ongoing tightening measures by the CBN. Credit to the private sector also saw an increase, rising to N75.48 trillion year-on-year in July 2024. On a month-on-month basis, banks’ credit to the private sector grew by 3.13 percent from N73.19 trillion in June 2024.
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