This significant increase, up from ₦4.88 trillion in December 2024, represents a ₦1.22 trillion rise from the ₦3.65 trillion reported in January 2024.

Analysts attribute the rise to sustained printing of the local currency by the CBN and the escalating inflation rate in the country.

The surge also reflects growing public distrust in the banking system, with many Nigerians opting for cash transactions amid economic uncertainty.

When CBN Governor Olayemi Cardoso assumed office in September 2023, currency in circulation stood at ₦2.76 trillion.

Despite the increase in currency circulation, Nigeria’s economic growth remains sluggish, with the 2024 growth rate projected at 2.9% to 3.1%, one of the slowest in West Africa.

In response to inflationary pressures, the CBN’s Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MPR) to a record 27.25%, signaling a strong monetary tightening stance aimed at stabilizing the economy.

Analysts believe the rise in currency circulation indicates increased government spending to mitigate economic hardship, which has fueled inflation.

Vice President of Highcap Securities Limited, David Adnori, noted that increased government spending injects more money into the economy, leading to higher inflation due to the economic trade-off between money supply and price stability.

[NaijaNews]