N105bn flows back into banks after CBN cuts rates

Cash held outside Nigeria’s banking system fell by N104.76bn between February and April 2026, following the Central Bank of Nigeria’s CBN decision to cut its benchmark interest rate at the first Monetary Policy Committee meeting of the year.

Data from the CBN’s money and credit statistics showed that currency outside banks declined from N5.19tn in February 2026, when the MPC reduced the Monetary Policy Rate by 50 basis points to 26.5 per cent, to N5.08tn in April 2026, a drop of 2.02 per cent. The CBN did not release currency data for March, making a month-on-month comparison impossible.

Total currency in circulation also fell during the period, declining by N63.46bn from N5.71tn in February to N5.65tn in April. The share of cash sitting outside banks moderated slightly to 90.03 per cent of total currency in circulation in April, compared with 90.87 per cent in February and 94.33 per cent in December 2025.

Compared with December 2025, currency outside banks fell by N324.16bn, or 5.99 per cent, from N5.41tn to N5.08tn.

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Despite the rate cut easing monetary policy, bank reserves held with the CBN rose from N32.74tn in February to N34.60tn in April, an increase of N1.86tn or 5.68 per cent, suggesting banks retained stronger liquidity buffers following the MPC decision.

On a year-on-year basis, currency outside banks was still 11.29 per cent higher than in April 2025, pointing to the continued dominance of cash transactions despite growth in digital payment channels.

Nigeria’s broad money supply also expanded, rising to N124.99tn in April 2026 from N123.12tn in February, driven largely by growth in net domestic assets.