Currency outside Nigerian banks fell to N4.8 trillion in July 2026, its lowest level in eight months, as cash held outside the banking system declined for the second consecutive month.
According to the latest Central Bank of Nigeria (CBN) data, the figure dropped by N118.7 billion, or 2.4 per cent, from N4.92 trillion in June. The decline followed a fall from N5.19 trillion in May and represents an N450.2 billion, or 8.6 per cent, reduction from the N5.25 trillion recorded in January.
The drop also came as Nigeria’s total currency in circulation declined to N5.38 trillion in July, down N140.6 billion, or 2.5 per cent, from N5.52 trillion in June. Despite the decline, cash outside banks still made up the bulk of currency in circulation, highlighting the continued importance of cash in everyday economic activity.
Meanwhile, bank reserves moved in the opposite direction, rising sharply from N34 trillion in June to N36.73 trillion in July. The N2.73 trillion increase, representing an 8 per cent rise, suggests that a larger share of monetary liquidity was held within the banking system rather than as physical cash outside banks.
The latest movement comes as the CBN pushes Nigeria towards a more digital and financially inclusive economy. The apex bank has set a target of reducing cash outside banks to below 40 per cent of total currency in circulation while aiming to achieve 95 per cent financial inclusion by 2028. The decline in cash holdings could reflect growing use of electronic payments, increased movement of funds through bank accounts and changing demand for physical cash.
source: nairametrics
