Cash held outside the banking system fell by N104.76bn between February and April 2026 following the Central Bank of Nigeria’s decision to lower interest rates at its first Monetary Policy Committee meeting of the year, findings by The PUNCH have shown. Data obtained from the CBN’s money and credit statistics indicated that currency outside banks declined from N5.19tn in February 2026, when the MPC reduced the Monetary Policy Rate to 26.5 per cent, to N5.08tn in April 2026.
The figures showed that cash held outside bank vaults dropped by 2.02 per cent within the two-month period following the rate cut. The apex bank, however, did not release currency data for March 2026, making a month-on-month comparison impossible. Further analysis of the data showed that total currency in circulation also declined during the review period, dropping by N63.46bn from N5.71tn in February to N5.65tn in April.
The proportion of currency circulating outside the banking system also moderated slightly. Currency outside banks accounted for 90.03 per cent of total currency in circulation in April 2026, compared with 90.87 per cent in February and 94.33 per cent in December 2025.
The development suggests that a marginally larger share of cash remained within the banking system following the February MPC decision. Compared with December 2025, currency outside banks fell by N324.16bn from N5.41tn to N5.08tn, representing a decline of 5.99 per cent.
The figures point to tighter liquidity retention within the banking sector despite the reduction in the benchmark interest rate. However, despite the recent moderation, cash levels remained above the figures recorded in the corresponding period of 2025. Related News MTN remits N879bn taxes amid revenue, profit growth Food manufacturers reject multiple taxes, regulatory burdens ‘Tourism, hospitality can drive Nigeria’s GDP growth’ Currency outside banks increased by N515.58bn from N4.57tn in April 2025 to N5.08tn in April 2026, representing an 11.29 per cent year-on-year rise.
Similarly, currency in circulation rose by N631.54bn from N5.01tn in April 2025 to N5.65tn in April 2026, translating to a 12.60 per cent increase. The figures show the continued dominance of cash transactions in the economy despite the growth of digital payment channels.
Meanwhile, reserves held by banks with the CBN rose sharply within the review period. Bank reserves increased from N32.74tn in February 2026 to N34.60tn in April 2026, reflecting an increase of N1.86tn, or 5.68 per cent. On a year-on-year basis, reserves rose by N4.88tn from N29.72tn in April 2025, representing a 16.43 per cent increase.
The rise indicates that banks maintained stronger liquidity buffers even after the apex bank eased monetary policy in February. The PUNCH had earlier reported that the CBN reduced the Monetary Policy Rate by 50 basis points to 26.5 per cent from 27 per cent at the 304th meeting of the MPC held in Abuja.
Despite the decline in currency circulation, Nigeria’s broad money supply rose to N124.99tn in April 2026 from N123.12tn in February 2026, indicating an increase of about N1.87tn within the two-month period. The increase was driven largely by growth in net domestic assets, which rose from N97.55tn in February to N100.97tn in April 2026.
Data obtained from the CBN’s money and credit statistics indicated that currency outside banks declined from N5.19tn in February 2026, when the MPC reduced the Monetary Policy Rate to 26.5 per cent, to N5.08tn in April 2026. The figures showed that cash held outside bank vaults dropped by 2.02 per cent within the two-month period following the rate cut.