Cash Outside Banks Falls to N5.20trn in February

Nigeria’s cash liquidity cycle showed signs of normalisation in February 2026, as currency held outside banks fell slightly by 0.058% to ₦5.20 trillion, reflecting easing demand for physical cash after the year-end spending surge.

According to the Central Bank of Nigeria’s Money and Credit Statistics, overall money supply also declined to ₦123.14 trillion, down from ₦123.35 trillion in January, while total currency in circulation remained stable at ₦5.73 trillion.

The moderation follows months of elevated withdrawals during festive activities. Cash outside banks had peaked at ₦5.41 trillion in December 2025, before easing to ₦5.21 trillion in January and ₦5.20 trillion in February.

Analysts say the trend reflects households and businesses redepositing excess cash after the holiday season, highlighting Nigeria’s typical seasonal cash cycle—spikes in demand during festivities, followed by moderation in the new year.

Historical data shows cash holdings rose steadily in late 2025, from ₦4.65 trillion in October to ₦5.41 trillion in December, before easing again in early 2026. Despite this decline, cash remains widely used, especially in the informal sector.

The CBN noted that improved liquidity recycling supports financial intermediation and monetary policy effectiveness, as excess funds gradually return to banks.

Experts say the continued normalisation suggests Nigeria’s liquidity cycle is stabilising, even though physical cash still dominates many segments of the economy despite the growth of digital payments.

The report underscores the entrenched role of cash in Nigeria’s financial system, while pointing to gradual progress in balancing cash usage with expanding electronic payment channels.