Currency Outside Banks Down 3.66%, Currency in Circulation Unchanged at N5.73trn

Nume Ekeghe

Nigeria’s cash holdings outside the banking system eased in February 2026, reflecting a moderation in cash demand after the year-end spending surge as currency outside banks declined by 3.66 per cent to N5.21 trillion, while total currency in circulation remained largely unchanged at N5.73 trillion, according to the latest money and credit statistics from the Central Bank of Nigeria (CBN).

Analysis of the numbers posted on the CBN website show the continued dominance of physical cash in the economy, particularly within the informal sector, even as overall liquidity conditions remained broadly stable.

According to analysts, such seasonal patterns are typical as cash demand rises sharply during festive periods and eases at the start of a new year, as households and businesses return excess currency to banks.

A review of the past year illustrates this trend. In December 2025, currency outside banks peaked at N5.41 trillion, driven by year-end liquidity build-up, festive spending, increased retail activity, and higher withdrawals by households and businesses. Prior to this, cash outside banks rose steadily from N4.91 trillion in November 2025, up from N4.65 trillion in October, signalling gradual accumulation ahead of the year-end surge.

During the second half of 2025, currency outside banks exhibited a mixed trajectory. Figures show N4.46 trillion in August, slightly lower than N4.42 trillion in July, while June and May recorded N4.49 trillion and N4.63 trillion respectively, reflecting intermittent adjustments in cash demand amid evolving economic conditions.

In the first quarter of 2025, currency outside banks remained relatively stable but elevated. February 2025 stood at N4.51 trillion, March at N4.60 trillion, and April at N4.57 trillion, before reaching N4.74 trillion in January. Similarly, at the end of 2024, currency outside banks jumped from N4.65 trillion in November to N5.13 trillion in December, reflecting the traditional surge in cash withdrawals during the festive season.

Total currency in circulation has mirrored these patterns. February 2026 figures showed N5.73 trillion, unchanged from N5.732 trillion recorded in January 2026, indicating only a marginal moderation in overall liquidity. 

The trend reflects a cyclical rhythm in cash demand. Liquidity peaks during festive periods before easing in the early months of the year, while households and businesses gradually adjust their cash holdings in line with seasonal consumption and economic activity.