The amount of currency in circulation in the country rose in January 2025 to N5.235 trillion, a 7.3 per cent and 43.6 per cent increase compared to the November and January 2024 figures respectively as the credit by the financial system to both the government and private sector declined last month.
Data just released by the Central Bank of Nigeria (CBN) showed that the total currency in circulation rose from the November figure of N4.878 trillion to N5.235 trillion in January. This is compared to N3.65 trillion that was in circulation in January last year.
At N4.74 trillion, the currency outside banks also rose in the period under review, rising by 1.9 per cent and 44.5 per cent when compared to N4.65 trillion and N3.28 trillion that was in circulation outside the formal financial system as at November and January last year respectively.
The money and credit statistics showed that with N4.74 trillion, or 90.4 per cent, of the total currency in circulation being held outside the banking system, cash continued to remain king in the economy.
Meanwhile, the credit to the economy by the financial system, while almost at the same level which it was in January last year, was down by 14 per cent compared to the total credit as at November last year.
According to the CBN data, credit declined from N115.576 trillion in November 2024 to N99.405 trillion last month.
The decline was mainly due to a cut in lending to the government. Data showed that financial sector credit to the government declined by 38.1 per cent from N39.61 trillion in November 2024 to N24.51 trillion in January 2025.
Credit to the private sector also declined albeit not at the same rate with credit to government. Data showed that financial system credit to the private sector stood at N74.88 trillion as against N75.96 trillion that was recorded in November and N76.47 trillion in January last year.
