As overall currency in circulation remained largely stable, the volume of cash in the hands of Nigerians that is outside the banking system declined in February 2026, showing a moderation in liquidity demand following the usual year-end spending surge.
Latest Money and Credit Statistics released by the Central Bank of Nigeria (CBN) showed that currency outside banks fell by 3.66 per cent to N5.21 trillion in February, down from the elevated levels recorded in the preceding months. In contrast, total currency in circulation stood at N5.73 trillion, almost unchanged from N5.732 trillion recorded in January.
The development reflects a seasonal adjustment in cash usage, as households and businesses typically return excess cash to the banking system after heightened festive spending.
Analysts note that such patterns are consistent with Nigeria’s liquidity cycle, where demand for physical cash rises sharply towards year-end before easing in the early months of a new year.
Data from the apex bank indicate that currency outside banks peaked at N5.41 trillion in December 2025, driven by increased retail activities, festive expenditures and higher withdrawals across the economy. The December surge followed a steady build-up in preceding months, rising from N4.91 trillion in November and N4.65 trillion in October, underscoring gradual accumulation ahead of the holiday season.
A broader review of trends in the second half of 2025 shows a mixed movement in cash holdings. Currency outside banks stood at N4.63 trillion in May before easing to N4.49 trillion in June, and further to N4.42 trillion in July. It, however, edged up slightly to N4.46 trillion in August, reflecting intermittent shifts in liquidity demand amid evolving macroeconomic conditions.
Similarly, in the first quarter of 2025, cash outside the banking system remained relatively stable but elevated. Figures show N4.74 trillion in January, moderating to N4.51 trillion in February, before rising to N4.60 trillion in March and slightly declining to N4.57 trillion in April. At the close of 2024, the trend was more pronounced, with currency outside banks increasing sharply from N4.65 trillion in November to N5.13 trillion in December, in line with festive season spending pressures.
Despite the moderation in February 2026, the data underscore the continued dominance of cash in Nigeria’s economy, particularly within the informal sector, where transactions remain largely cash-driven. The stability in total currency in circulation suggests that overall liquidity conditions in the system remain broadly unchanged.
