The value of Nigeria’s Currency in Circulation, CIC, increased to N3.87 trillion at the end of the first quarter of 2024 as money outside the banking system surged.

This is according to the latest money and credit statistics on the Central Bank of Nigeria website.CIC stood at N3.87 trillion at the end of March 2024, higher than N3.69 trillion in February and N3.65 trillion in January.

However, currency outside banks surged during the first quarter, growing from N3.28tn in January to N3.41 trillion and N3.63 trillion in February and March, respectively.The data revealed that over 90 per cent of currency in circulation is held outside the banking system, indicating that Nigerians hold more cash.The development comes as banks resume processing fees for deposits.

In their statements released last week, one of the members of the Monetary Policy Committee of the CBN at their March meeting, Muhammad Abdullahi, said that the apex bank had identified high currency outside banks as one of the monetary drivers of the country’s inflation.“While this cannot be directly influenced using monetary policy tools, the bank’s response to the drivers of headline inflation is targeted at addressing identified monetary drivers such as money supply growth,exchange rate depreciation and Currency-Outside-Banks, the combined impact of which will dampen inflationary pressure significantly,” he said.

In January 2024, at the height of the currency redesign policy, currency in circulation stood at N1.386tn, with the percentage of the cash outside the banks at 57 per cent at N792.184 billion.By February, the cash outside banks rose to N843.311 billion, representing 85.9 per cent of the N982.097bn in circulation.It dropped further in March to 85.8 per cent, with N1.445 trillion of the N1.683 trillion CIC outside the banking system.