N3.28trn Cash Outside Banking System – CBN

Data released by the Central Bank of Nigeria (CBN) shows that the amount of  currency outside banks at the end of January 2024 stood at N3.28 trillion, constituting 89 per cent of the N3.65 trillion total currency in circulation (CIC).

The latest data is an improvement of the ratio of currency outside banks compared to currency in circulation which was 94 per cent in December 2023 which was a staggering N3.43 trillion currency outside bank from N3.65 trillion total currency in circulation (CIC).

However, a Year on Year (YoY) comparison between January 2023 and January 2024 showed that current outside banks recorded an astonishing 314 per cent increase from N79 billion in 2023 to N3.28 trillion in 2024.

Also looking at the same years in review, YoY for currency in circulation showed an increase of 163 percent from January 2023 which records N1.38 trillion while January 2024 recorded N3.65 trillion. A detailed breakdown of the trends in 2023 illustrates fluctuations in both Currency in Circulation (CIC) and currency held outside banks.

In January last year, at the height of the currency redesign, currency in circulation stood at N1.386 trillion with the percentage of the cash outside the banks standing 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 N982.097 billion that was in circulation.

By March, the percentage had dropped to 85.8 per cent with N1.445 trillion of the N1.683 trillion CIC, outside the banking system. As the currency in circulation rose to N2.379 trillion in April, the currency outside banks rose to 87.3 per cent at N2.078 trillion.

In May, the percentage dropped to 86.2 per cent as cash outside banks stood at N2.177 trillion out of the N2.526 trillion CIC. By June the currency outside banks further rose to N2.263 trillion, which is 86.9 per cent of the N2.603 trillion that is CIC.

July saw a decline in cash supply as currency outside the banks as well as CIC dropped to N2.206 trillion and N2.595 trillion respectively, with the percentage also dropping to 85 per cent. The uptick resumed in August with the percentage of cash outside banks which was N2.223 trillion dropped to 83.6 per cent of the N2.66 trillion CIC.

The uptick continued in September with N2.761 trillion CIC of which 87.5 per cent, N2.416 trillion was outside the banking system. A review of the 11 months period showed that November 2023 marked the highest recorded levels for both currency in circulation and currency outside banks, with the percentage of money outside the banks concerning CIC reaching a peak of 92 per cent.

December 2023 marked the zenith for both currency in circulation and currency outside banks, with the percentage of money held outside banks reaching an all-time high of 94 per cent of CIC. The subsequent data for January 2024, however, indicates a positive shift, presenting a more balanced distribution between currency in circulation and that held outside banks.