Currency in circulation hits N5.24trn as bank lending drops
BY TEMITOPE ADEBAYO
The volume of currency in circulation surged to N5.235 trillion in January 2025, marking a 7.3 per cent increase from November 2024 and a 43.6 per cent rise compared to January last year, even as bank credit to both the government and private sector declined.
Data from the Central Bank of Nigeria (CBN) shows that currency in circulation rose from N4.878 trillion in November to N5.235 trillion in January, significantly higher than the N3.65 trillion recorded a year earlier.
Meanwhile, credit to the economy fell by 14 per cent from N115.576 trillion in November to N99.405 trillion in January, largely due to a sharp reduction in lending to the government.
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.
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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 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 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.
