A report by the Central Bank of Nigeia (CBN’) said the amount of currency held outside banks, has dropped to N3.28 trillion in January 2024.
Analysts say, lower money in circulation may lead to lack of spending in the economy, which can lead to recession and unemployment.
They argued that in times of economic crisis, it was important to increase public spending to boost the velocity of money circulation and stimulate economic activity.
This figure represents 89 per cent of the total currency in circulation (CIC), signifying a shift in money circulation patterns.
Compared to December 2023, where currency outside banks stood at 94 per cent of the total CIC, the recent decline suggests a reconfiguration in monetary dynamics.
The report further unveils a significant year-on-year surge, with currency outside banks skyrocketing by 314 per cent, rising from N79 billion in January 2023 to N3.28 trillion in January 2024.
Currency trends in 2023 displayed fluctuating patterns, with notable peaks and dips throughout the year. However, December 2023 marked the zenith, recording the highest percentage of money held outside banks to CIC at 94 per cent.
The CBN report sheds light on evolving financial landscapes, reflecting changing consumer behaviors, economic policies, and market dynamics.
Analysts anticipate that the data will inform future monetary policies and regulatory measures to ensure financial stability and liquidity in Nigeria’s economy amidst shifting trends and emerging challenges.
