Currency outside banks drops to N3.66tn in July

• Published On: 29 August 2024 at 18:38

In July 2024, the amount of currency outside the Nigerian banking system fell to N3.66 trillion, down 3.32% from the previous month's figure of N3.79 trillion.

This, the second decline of the year, reflects the Central Bank of Nigeria's ongoing efforts to tighten liquidity and encourage deposits into the formal banking sector.

The July decrease is significantly larger than the 0.62% drop observed between March and April, when the amount fell from N3.63 trillion to N3.61 trillion, according to Nairametrics.

Despite the decrease in currency outside of banks, the total currency in circulation increased marginally from N4.05 trillion in June to N4.06 trillion in July, representing a 0.12% growth.

This slight increase in circulation suggests that the economy's cash usage is stabilizing, which could be influenced by an increase in digital transactions or regulatory efforts to manage cash flow.

Furthermore, the proportion of currency outside banks fell to 90.39% of total circulation in July, from 93.59% in June.

June 2024 marked a watershed moment, as currency in circulation surpassed N4 trillion for the first time.

While currency circulation reached a new high in July, the decrease in currency held outside of banks suggests a potential shift in behavior, with more funds being deposited into the banking system.

This trend demonstrates the effectiveness of the CBN's ongoing efforts to attract more money into formal financial channels.