Cash Outside Banks Decline to N5.19trn

Currency outside the banking system declined to N5.19 trillion in February 2026, after months of elevated cash holdings.

Latest figures from the Central Bank of Nigeria (CBN) showed that cash outside banks eased from N5.21 trillion recorded in January and dropped notably from the N5.40 trillion peak in December 2025.

In the same vein, currency in circulation fell slightly to N5.71 trillion in February, compared to N5.73 trillion in the preceding month, extending a gradual moderation trend.

Despite the recent decline, cash levels remained significantly higher on a year-on-year basis. Currency outside banks stood at N4.51 trillion in February 2025, indicating that structural demand for cash persists amid ongoing monetary tightening and efforts to promote digital payment channels.

An analysis of the past year reflects a steady build-up in cash holdings driven by inflationary pressures and increased transaction demand. By mid-2025, currency outside the banking system had crossed the N5 trillion mark, supported by precautionary hoarding and rising cost of transactions.

The surge intensified towards the end of the year, with December 2025 recording an all-time high of N5.40 trillion, largely influenced by seasonal spending, liquidity injections, and lingering concerns over the reliability of electronic payment systems during peak periods.

However, the latest data indicates a shift in trend, with currency outside banks declining consecutively from January to February 2026, marking the first sustained moderation in several months.

A similar trajectory was observed in currency in circulation, which had expanded steadily throughout 2025 in line with monetary growth and the economy’s entrenched reliance on cash, but has now begun to taper slightly.