More than 104.7 billion naira (about US$70 million) in cash returned to Nigeria’s banking system between February and April 2026 following the Central Bank of Nigeria’s decision to lower interest rates, according to official monetary data.
Figures from the Central Bank of Nigeria (CBN) show that currency held outside banks fell from 5.19 trillion naira (about US$3.46 billion) in February to 5.08 trillion naira (about US$3.39 billion) in April, representing a decline of 2.02 percent.
The development followed the CBN’s decision in February to cut its benchmark Monetary Policy Rate (MPR) by 50 basis points to 26.5 percent, marking the first easing of monetary policy after an extended period of tightening.
The reduction in cash held outside the banking system suggests that a slightly larger share of money was retained within banks, potentially improving liquidity available for lending and financial intermediation.
Data also showed that total currency in circulation declined by 63.46 billion naira (about US$42 million) during the period, falling from 5.71 trillion naira (about US$3.81 billion) in February to 5.65 trillion naira (about US$3.77 billion) in April.
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Currency outside banks accounted for 90.03 percent of total currency in circulation in April, down from 90.87 percent in February and 94.33 percent in December 2025.
Compared with December, cash held outside the banking sector dropped by 324.16 billion naira (about US$216 million), representing a decline of nearly 6 percent.
Despite the moderation, cash usage remains elevated in Africa’s largest economy. Currency outside banks was still 11.29 percent higher than a year earlier, rising from 4.57 trillion naira (about US$3.05 billion) in April 2025.
Similarly, total currency in circulation increased by 12.6 percent year-on-year from 5.01 trillion naira (about US$3.34 billion) to 5.65 trillion naira (about US$3.77 billion).
Analysts say the figures highlight the continued importance of cash transactions in Nigeria despite rapid growth in digital payments and mobile banking services.
Meanwhile, reserves held by commercial banks at the central bank rose significantly, increasing by 1.86 trillion naira (about U$1.24 billion) from 32.74 trillion naira (about US$21.83 billion) in February to 34.60 trillion naira (about US$23.07 billion) Sin April.
On an annual basis, bank reserves climbed 16.43 percent from 29.72 trillion naira (about US$19.81 billion) recorded in April 2025.
The data indicate that banks maintained strong liquidity positions even after the central bank eased monetary policy.
Nigeria’s broad money supply also expanded during the period, rising by 1.87 trillion naira (about US$1.25 billion) from 123.12 trillion naira (about US$82.08 billion) in February to 124.99 trillion naira (about US$83.33 billion) in April.
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The increase was largely driven by growth in net domestic assets, which rose from 97.55 trillion naira (about US$65.03 billion) to 100.97 trillion naira (about US$67.31 billion).
Economists say the figures suggest that while monetary conditions have eased modestly, liquidity remains well supported within the banking sector, providing a foundation for credit growth while the central bank continues to balance inflation control with economic expansion.
