The amount of money held outside Nigerian banks decreased to N3.66 trillion in July 2024, marking a second drop this year. This reduction of 3.32% (N130 billion) from the previous month underscores the Central Bank of Nigeria’s (CBN) continued efforts to tighten liquidity and encourage formal banking deposits.
This decline is more pronounced compared to the 0.62% (N20 billion) drop observed between March and April, when the amount fell from N3.63 trillion to N3.61 trillion. Despite this decrease, the total currency in circulation saw a slight increase from N4.05 trillion in June to N4.05 trillion in July, a modest rise of 0.12%.
This minimal increase indicates a potential stabilization in cash usage, possibly due to higher adoption of digital transactions or regulatory measures aimed at managing cash flow. Furthermore, while total currency circulation grew slightly, the proportion of currency outside banks fell to 90.39% (N3.66 trillion) from 93.59% the previous month, signaling the effectiveness of the CBN’s strategy to channel more money into the formal banking sector.
