Currency held outside Nigeria’s banking system dropped to its lowest level in seven months in June 2026, signalling a gradual return of physical cash to deposit money banks as the Central Bank of Nigeria continues efforts to expand digital payments.
According to the CBN’s latest Money and Credit Statistics, cash outside banks fell to N4.92 trillion in June from N5.19 trillion in May, a month-on-month decline of N270.97 billion or 5.22%. Over the six months from December 2025, the figure declined by N485.80 billion or 8.98%, from N5.41 trillion to N4.92 trillion.
The June level is the lowest since November 2025, when currency outside banks stood at N4.91 trillion.
Total Currency in Circulation Also Declines
Total currency in circulation decreased from N5.73 trillion in December 2025 to N5.52 trillion in June 2026, a reduction of N209.56 billion or 3.66%. The sharper drop in cash outside banks relative to overall circulation indicates that a larger share of physical currency returned to the formal banking system rather than being permanently withdrawn.
The trend was not uniform. Cash outside banks declined steadily from December through April, rose briefly by N109.34 billion in May, and then recorded its largest monthly contraction of the period in June.
Growing Share of Cash Within Banks
In June, cash outside banks accounted for 89.11% of total currency in circulation, down from 91.27% in May and 94.33% at the end of 2025. This means that roughly N89 of every N100 in circulation was held outside banks in June, compared with about N91 a month earlier and N94 at the close of last year.
The share retained within the banking system rose correspondingly to 10.89% in June, up from just 5.67% in December 2025.
Digital Push Continues Amid Cash Dominance
The decline aligns with the Central Bank’s ongoing drive to promote electronic payments and deepen financial inclusion. Despite rapid growth in instant payment platforms, mobile banking, fintech services and agent networks, cash remains dominant in retail markets, transportation, rural communities and the informal sector.
The latest figures suggest a gradual shift toward greater formalisation of currency holdings, even as Nigeria’s economy continues to rely heavily on physical cash for everyday transactions.
