Nigeria's total currency in circulation experienced a moderate decrease, settling at N5 trillion in March 2025. This figure represents a dip from the N5.04 trillion recorded in the preceding month of February and a further reduction from the N5.24 trillion observed in January 2025, according to the latest money and credit statistics published by the Central Bank of Nigeria (CBN).
Currency in circulation represents the aggregate value of physical naira notes and coins actively circulating within the economy. It signifies the money readily available for everyday transactions, investments, and savings by individuals and businesses.
The observed contraction in the amount of naira in circulation could be indicative of ongoing strategies aimed at mitigating inflationary pressures and fostering broader economic stability within the nation. Central banks often employ measures to manage the flow of currency as a tool to influence economic indicators.
Conversely, the data reveals a positive trend in the Central Bank's reserves held by commercial banks. These reserves saw an increase to N28.52 billion in March 2025, building upon the N27.57 billion recorded in February and the N27.43 billion in January of the same year.
Bank reserves are crucial funds maintained by the CBN and commercial banks to ensure sufficient liquidity and overall financial stability within the banking sector. The consistent growth in these reserves suggests the CBN's proactive stance in safeguarding financial security and stability across the Nigerian economy.
Interestingly, the special intervention reserves held steady at N284.36 million throughout the three-month period under review, indicating no change in this specific category of reserves.
Examining the corresponding period in the previous year, March 2024 witnessed a different trajectory. The value of Nigeria's currency in circulation had then risen to N3.87 trillion by the end of the month, marking an increase from N3.69 trillion in February and N3.65 trillion in January 2024.
Furthermore, the amount of currency held outside of banks also experienced a steady upward trend during the first quarter of 2024, growing from N3.28 trillion in January to N3.41 trillion in February and reaching N3.63 trillion by March. This comparison highlights the shift in the direction of currency circulation observed in the current year.
In a related development, Nigeria's overall money supply recorded its first decline in 2025, falling to N110.32 trillion in February from N110.94 trillion in January, as indicated by CBN data. This 0.56 percent month-on-month decrease occurs amidst the central bank's sustained efforts to manage liquidity within the financial system, following earlier indications of monetary tightening policies and adjustments in foreign exchange rates.
These concurrent movements in currency circulation and money supply underscore the complex interplay of factors influencing Nigeria's monetary landscape as the CBN navigates the economic environment.