Naira in Circulation Reduces as CBN Moves to Stabilise FX Market

• The total value of naira in circulation decreased from N5.04 trillion in February 2025 to N5 trillion as of March 2025
• Controlling the quantity of money in circulation is one way to maintain economic stability and reduce inflationary pressures
• The special intervention reserves remained steady at N284.36 million for the three months

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

As of March 2025, the total amount of naira in circulation was N5 trillion, down from N5.04 trillion in February 2025.

According to the most recent money and credit figures available on the Central Bank of Nigeria's website, this is a further decrease from N5.24 trillion in January 2025.

The total quantity of naira in circulation is the amount of actual money that is in use throughout the economy and can be used for savings, investments, and everyday activities.

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One strategy to manage economic stability and lessen inflationary pressures is to restrict the amount of currency in circulation.

Along with the amount of naira in circulation, the CBN's bank reserves have grown from N27.57 billion in February 2025 to N28.52 billion in March 2025. N27.43 billion was the amount of reserves as of January 2025.

Over the course of the three months, the special intervention reserves stayed constant at N284.36 million.

Bank reserves refer to the cash retained by the Central Bank and commercial banks to provide liquidity and financial stability within the banking industry. The consistent rise in bank reserves is an indicator of the CBN’s efforts to ensure financial security and stability in the economy.

The PUNCH stated that by the end of March 2024, the value of Nigeria's money in circulation had increased to N3.87 trillion, compared to the same period the previous year.

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Compared to N3.69 trillion in February and N3.65 trillion in January, this represented a gain. Additionally, during the first quarter, the currency outside of banks increased steadily, rising from N3.28 trillion in January to N3.41 trillion in February and N3.63 trillion in March.

According to data from the Central Bank of Nigeria, Nigeria's money supply saw its first decrease in 2025, dropping from N110.94 trillion in January to N110.32 trillion in February.

The 0.56% monthly decline follows earlier indications of monetary tightening and foreign exchange adjustments, and it coincides with the top bank's ongoing attempts to control system liquidity.

Meanwhile, over the previous week, the naira's performance on the foreign exchange market has been inconsistent.

This shows that despite the Central Bank of Nigeria's ongoing efforts to stabilise the market, there is still pressure on the local currency.

Researchers at Cowry Asset Management Limited claimed that by putting weekly FX defence plans into place, the CBN continued to take an interventionist approach.

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Money supply records first decline in 2025

Legit.ng earlier reported that the Central Bank of Nigeria has shown that the money supply in Nigeria had its first decrease in 2025, dropping from N110.94 trillion in January to N110.32 trillion in February.

The 0.56% monthly decline coincides with the top bank's ongoing attempts to control systemic liquidity in the wake of previous indications of monetary tightening and foreign exchange adjustments.

The money supply in February 2024 was N95.56 trillion, representing a 15.45% year-over-year increase. The increase in M3 money supply, which incorporates both net foreign assets and net domestic assets, offers a more comprehensive picture of the nation's monetary dynamics, even with the slight slowdown.

Proofreading by James Ojo, copy editor at Legit.ng.

Source: Legit.ng