The amount of naira circulating within Nigeria’s economy declined to N5 trillion as of March 2025, according to the latest figures from the Central Bank of Nigeria (CBN).
This marks a slight decrease from N5.04 trillion recorded in February 2025 and a further drop from N5.24 trillion registered in January. The figures were published in the CBN’s recent update on money and credit statistics.
Currency in circulation refers to the total value of physical cash—coins and banknotes—available for use in daily transactions, investments, and savings. A reduction in this figure often reflects efforts by monetary authorities to curb inflation and manage economic stability.
Rise in Bank Reserves
Alongside the drop in circulating currency, Nigeria’s bank reserves posted a steady rise. Bank reserves increased to N28.52 billion in March, up from N27.57 billion in February and N27.43 billion in January.
Meanwhile, special intervention reserves held steady at N284.36 million over the three-month period.
Bank reserves are critical for maintaining liquidity and financial security within the banking system. The consistent growth in reserves signals the CBN’s strategy to strengthen economic resilience amid ongoing monetary adjustments.
Context and Comparisons
Comparing year-on-year figures, Nigeria’s currency in circulation stood at N3.87 trillion by the end of March 2024, reflecting a steady rise from N3.65 trillion in January 2024.
During the first quarter of 2024, currency outside the banking system also showed consistent growth, rising from N3.28 trillion in January to N3.63 trillion by March.
In a related development, Nigeria’s overall money supply experienced its first decline of 2025, falling from N110.94 trillion in January to N110.32 trillion in February. This 0.56% month-on-month drop reflects continued tightening measures by the CBN to control liquidity and stabilize the naira against external pressures.
Policy Implications
The CBN’s monetary tightening efforts, including adjustments to foreign exchange policies and liquidity controls, are aimed at managing inflation, supporting exchange rate stability, and ensuring sustainable economic growth.
Analysts suggest that while reducing money supply and currency in circulation can help curb inflation, it must be balanced carefully to avoid constraining economic activities, especially in sectors dependent on cash transactions.
As the CBN continues its cautious approach to monetary policy, close attention will be paid to how these measures impact inflation trends, currency stability, and overall economic growth in the coming months.
