Cash Outside Banks Falls to N5.20 Trillion in February 2026 as Nigeria’s Liquidity Cycle Stabilizes

Nigeria’s cash held outside the banking system declined slightly in February 2026, falling by 0.058% to N5.20 trillion, as liquidity pressures eased following the festive season spending surge. The development suggests a gradual return of cash into the formal banking system as economic activity stabilizes.

According to the latest Money and Credit Statistics released by the Central Bank of Nigeria (CBN), the country’s overall money supply also recorded a marginal decline, dropping to N123.14 trillion in February from N123.35 trillion in January. Despite this dip, total currency in circulation remained largely stable at N5.73 trillion, pointing to steady liquidity conditions across the financial system.

The data further shows that the slight reduction in cash outside banks reflects households and businesses redepositing excess cash after heightened withdrawals during the 2025 festive period. Analysts note that this pattern is typical in Nigeria, where cash demand rises sharply in December due to retail spending before easing in the first quarter of the new year.

Historical trends reinforce this seasonal behavior. Cash outside banks had climbed from N4.65 trillion in October 2025 to N5.41 trillion in December before easing to N5.21 trillion in January 2026 and further down to N5.20 trillion in February. This steady moderation indicates improving liquidity recycling within the economy.

While digital payment adoption continues to grow, the data highlights that cash still plays a dominant role, especially in Nigeria’s informal sector. Economists say the current trend signals a more stable liquidity cycle, with excess funds gradually returning to banks, improving financial intermediation and supporting monetary policy effectiveness.

source: nairametrics