Currency held outside Nigerian banks fell to N4.8 trillion in July 2026, reaching its lowest level since November 2025 as physical cash circulating outside the banking system declined for a second consecutive month.
Latest money and credit data from the Central Bank of Nigeria revealed that high benchmark interest rates and targeted liquidity mop-ups successfully encouraged economic agents to return idle physical cash into high-yielding bank accounts.
The consecutive monthly reduction marks a notable reversal from earlier liquidity surges, returning cash metrics toward levels last observed in late 2025 amidst aggressive policy adjustments by the apex bank.
Broader adoption of digital payment channels, instant transfers, and agent banking rails also significantly reduced the necessity for physical cash in daily commercial transactions across urban and rural trading hubs.
The shift enhances the central bank’s policy transmission efficiency, giving authorities firmer control over broad money supply dynamics as they work to rein in inflation and maintain overall macroeconomic stability.
Commercial banks stand to benefit from the growing deposit pool, which bolsters institutional liquidity ratios and lowers funding costs while drawing more of Nigeria’s massive informal economy into trackable financial channels.
