Nigeria's cash outside banks rises to N4.92tn in September as money supply expands

Cash outside banks reaches new level The Central Bank of Nigeria (CBN) released data showing that physical cash held outside the formal banking system rose to N4.92 trillion in September 2026. This represents an increase of roughly N48.7 billion from the N4.87 trillion recorded in August, equating to about a 1 percent month‑on‑month growth. Compared with September 2025, the figure is about 10.3 percent higher, indicating a continued upward trend over the past year.

Money supply and policy backdrop The rise in cash outside banks formed part of a broader expansion in Nigeria’s money supply. Broad money, which includes cash, demand deposits, savings, time deposits and foreign‑currency holdings, grew by N7.51 trillion to reach N146.6 trillion in September, up from N139.09 trillion in August. Narrow money, comprising currency and highly liquid deposits, also increased to N44.05 trillion from N43.11 trillion a month earlier.

In September, the CBN implemented its largest benchmark interest‑rate reduction since December 2006, cutting the policy rate by 350 basis points to 23 percent from 26.5 percent. The Monetary Policy Committee kept the cash reserve requirement (CRR) unchanged at 45 percent for commercial banks, 16 percent for merchant banks, and maintained a 75 percent reserve on non‑Treasury Single Account public‑sector deposits.

Digital‑payments push and inclusion goals The CBN’s data release coincided with ongoing efforts to shift the economy toward digital payments. At the launch of the Nigeria Payment System Vision 2028, the central bank’s governor outlined a roadmap aimed at deepening financial inclusion and reducing reliance on physical cash. The strategy targets a reduction of cash outside banks to below 40 percent of total currency in circulation and seeks to bring 95 percent of the adult population into the formal financial system by 2028.

Despite the September increase, cash outside banks remained below the N5 trillion threshold that the country had exceeded in several earlier months of 2026. Analysts note that the modest rise may reflect the early impact of the CBN’s digital‑payment initiatives, although the overall level of cash outside banks still signals a sizable share of currency circulating outside formal channels.

Outlook The combination of a lower policy rate, stable reserve requirements and an aggressive digital‑payments agenda suggests the CBN is balancing monetary easing with structural reforms. Observers will watch whether the month‑on‑month increase in cash outside banks stabilises or reverses as digital alternatives gain traction and the broader money supply continues to expand.