Micah Jonah
March 16, 2026
Cash held outside Nigeria’s banking system fell by N197.68 billion in January 2026, dropping to N5.21 trillion from N5.41 trillion in December 2025, according to the Central Bank of Nigeria’s (CBN) latest Money and Credit Statistics.
Despite this decline, over 90 per cent of cash in circulation remained outside bank vaults, indicating that a large share of currency still operates outside the formal banking system. Year-on-year, cash outside banks rose by N473 billion from N4.74 trillion in January 2025, while total currency in circulation increased by N495.68 billion to N5.73 trillion.
The broad money supply (M3) also dipped by N1.05 trillion to N123.36 trillion, largely due to a fall in Nigeria’s net foreign assets, which declined to N29.61 trillion from N31.51 trillion in December 2025. Conversely, domestic liquidity conditions expanded, with net domestic assets rising by N850.76 billion to N93.76 trillion.
Narrow money, the most liquid form of money, increased slightly to N42.33 trillion, while M2 – the slightly broader measure fell by N1.05 trillion to N123.35 trillion.
The CBN attributed the movements to ongoing monetary policy efforts aimed at curbing inflation and stabilising the foreign exchange market. Following these developments, the Monetary Policy Committee reduced the benchmark interest rate by 50 basis points to 26.5 per cent, citing continued disinflation, exchange rate stability, and improved food supply as key supporting factors.
Headline inflation eased to 15.10 per cent in January 2026, while food inflation dropped to 8.89 per cent and core inflation to 17.72 per cent, marking a sustained softening of price pressures.
The CBN reaffirmed its commitment to evidence-based policies to ensure price stability while maintaining the resilience of Nigeria’s financial system.
