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Currency held outside the banking system and total currency in circulation recorded slight declines in January 2026, reflecting a moderation in cash demand following the surge typically seen during year-end festivities.
According to the latest money and credit statistics released by the Central Bank of Nigeria (CBN), currency outside banks dropped by 3.66% to N5.21 trillion in January 2026, down from N5.41 trillion in December 2025.
Total currency in circulation also edged down marginally by 0.03% to N5.73 trillion during the same period, compared with N5.732 trillion in December, indicating that overall liquidity conditions in the economy remained relatively stable despite the post-holiday adjustment.
The figures highlight the continued dominance of cash held outside the banking system in Nigeria’s monetary environment, reflecting the country’s strong reliance on physical cash transactions, particularly within the informal sector.
Seasonal Decline After Festive Spending
The January decline follows a typical seasonal trend where cash demand rises sharply during the festive period due to increased consumer spending and retail transactions.
At the start of a new year, households and businesses often return excess cash to the banking system as spending slows, resulting in a gradual easing of cash circulation.
Currency Outside Banks Shows Fluctuating Trend
A review of currency held outside banks over the past year shows a generally elevated but fluctuating trend.
In December 2025, currency outside the banking system surged to N5.41 trillion, driven by increased festive spending, higher retail activity, and elevated cash withdrawals by households and businesses.
Prior to this spike, the figure stood at N4.91 trillion in November 2025 and N4.65 trillion in October, reflecting a gradual buildup in cash demand toward the end of the year.
Earlier in the second half of 2025, the pattern remained mixed. Currency outside banks stood at N4.46 trillion in August, slightly down from N4.49 trillion in June but above the N4.42 trillion recorded in July. May 2025 recorded N4.63 trillion, highlighting periodic adjustments in cash demand amid shifting economic conditions.
Stable but Elevated Cash Holdings in Early 2025
During the first quarter of 2025, cash outside the banking system remained relatively steady but elevated. The figure stood at N4.57 trillion in April, N4.60 trillion in March, and N4.51 trillion in February, before reaching N4.74 trillion in January 2025.
At the close of 2024, cash holdings outside banks also experienced a notable jump, rising from N4.65 trillion in November to N5.13 trillion in December as festive spending and informal sector transactions intensified.
Currency in Circulation Remains Stable
A similar seasonal pattern was observed in total currency in circulation over the past year.
In January 2026, currency in circulation stood at about N5.731 trillion, slightly below the N5.732 trillion recorded in December 2025, reflecting only a marginal adjustment in overall liquidity levels across the economy.
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